04.07.2025 05:20

Gold prices experienced a significant drop of 0.80%, plummeting to $3,332 per ounce on Thursday. This sharp decline followed the release of unexpectedly robust US Nonfarm Payrolls data, which bolstered the US dollar and significantly altered market expectations regarding future Federal Reserve interest rate cuts.

The unexpectedly strong jobs report, exceeding both expectations and May's figures, pushed the unemployment rate closer to 4%. This directly contradicted the weaker-than-expected hiring numbers reported earlier in the week by the ADP National Employment Report, which indicated a decline of 33,000 private sector jobs. The robust employment data fueled a rise in US Treasury yields and strengthened the US dollar.

Market sentiment shifted dramatically in response to the Nonfarm Payrolls figures. Prior to the report, investors had priced in a 65 basis point reduction in interest rates by the Federal Reserve by the end of 2025. However, the unexpectedly positive employment data led to a revised forecast: investors now anticipate only two rate cuts during that same period. This reflects a strengthening belief that the Fed will maintain its current interest rate policy until clear signs of labor market weakness or deflationary pressures emerge.

Adding to the market's reassessment was a statement from US Treasury Secretary Scott Bessent. Bessent highlighted the expectation of further trade deals, following the recent agreement with Vietnam, and emphasized the Federal Reserve's autonomy in determining interest rate policy. He further indicated that the administration would commence the search for a successor to Chairman Powell in the autumn. Concurrent with these developments, the US House of Representatives advanced a fiscal budget bill, dubbed the "One Big Beautiful Bill," towards a final vote, a measure expected to increase the national debt. The implications of this budget for the economy and interest rates remain to be seen.