TLDR
- Gold rose nearly 1% after a conditional ceasefire was announced between Israel and Lebanon
- The dollar edged lower, making gold cheaper for international buyers
- Oil prices pulled back after three straight sessions of gains, easing inflation fears
- US private employers added 122,000 jobs in May, beating expectations
- Markets are watching Friday’s nonfarm payrolls report for clues on Fed rate policy
Gold prices climbed on Thursday after Washington announced a conditional ceasefire between Israel and Lebanon, easing some of the geopolitical pressure that had kept markets on edge.
Spot gold rose 0.9% to $4,476.07 an ounce, while US Gold Futures advanced 0.8% to $4,502.84 per ounce. The move came a day after gold fell more than 1%, pressured by a stronger dollar.
The ceasefire deal depends on Hezbollah halting hostilities. Despite the agreement, tensions in the region remain elevated.
Fresh military activity on Wednesday included reported Iranian missile attacks on Kuwait and Bahrain, along with US strikes on Iran’s Qeshm Island near the Strait of Hormuz. Israeli forces also expanded operations in southern Lebanon.
Oil prices eased in Asian trading on Thursday after three straight sessions of gains. That pullback reduced some concerns about rising energy costs feeding into global inflation.
Dollar Weakness Supports Gold
The US Dollar Index edged down 0.1% after hitting a two-month high in the previous session. A weaker dollar makes gold less expensive for buyers using other currencies, which tends to support demand.
Central banks continue to buy gold steadily, providing a floor of structural demand. However, ETF outflows and short-term traders positioning for a possible deeper pullback have kept prices rangebound.
Analysts at Saxo Bank noted that key support sits around $4,425, with markets watching Middle East developments and incoming US economic data closely.
Jobs Data in Focus
Attention is now turning to Friday’s nonfarm payrolls report, one of the most closely watched monthly economic releases.
On Wednesday, ADP data showed US private employers added 122,000 jobs in May. That beat economists’ expectations and improved on the prior month’s figure.
A separate ISM survey showed that prices paid by US services businesses jumped to the highest level since 2022. Higher costs for petroleum products drove much of that increase.
The data reinforced expectations that the Federal Reserve may keep interest rates elevated for longer. Higher rates are typically negative for gold, which pays no yield.
Among other metals, silver rose 0.9% to $73.41 per ounce and platinum gained 1.3% to $1,884.60 per ounce.
Copper slipped on global growth concerns, with London Metal Exchange futures down 0.4% and US futures falling 0.6%.
ING analysts said concerns over weaker global growth, higher energy costs and inflation weighed on sentiment, alongside profit-taking after the recent rally.
Markets will continue to monitor ceasefire developments and Friday’s jobs report before making any major moves in the precious metals space.
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