Gold prices edged lower on Friday but remained on track for a weekly gain, supported by safe-haven demand and weaker-than-expected U.S. job growth in February, which reinforced expectations of Federal Reserve rate cuts later this year.
Despite the daily decline, bullion has risen approximately 1.7% this week, buoyed by market uncertainty stemming from U.S. President Donald Trump’s shifting tariff policies.
The U.S. dollar index fell to a four-month low, marking its steepest weekly decline since November 2022, making dollar-priced gold more affordable for international buyers. “The weaker-than-expected jobs number is giving gold a slight boost, and a softer dollar this week is also helping,” said Bob Haberkorn, senior market strategist at RJO Futures.
A Labor Department report revealed that the U.S. economy added 151,000 jobs in February, below the 160,000 forecast by economists. The unemployment rate held steady at 4.1%, in line with expectations. Analysts noted that gold is in a consolidation phase, with ongoing support from safe-haven demand. Peter Grant, vice president and senior metals strategist at Zaner Metals, highlighted that the market is balancing between economic data and monetary policy expectations.
Federal Reserve Chair Jerome Powell reiterated a cautious approach to rate cuts, stating that the U.S. economy remains in a “good place.” However, the market is pricing in 76 basis points of rate cuts by year-end, with the first expected in June. Lower interest rates typically enhance gold’s appeal as a non-yielding asset.
Meanwhile, China continued its gold-buying spree for the fourth consecutive month in February, according to data from the People’s Bank of China.