Gold Becomes Even More Expensive Amid Weak US Economic Data Despite Trump-Xi Optimism

Spot gold climbs as rising jobless claims and cautious Fed comments fuel investor interest in safe-haven assets

June 7, 2025 | Reuters – Gold prices edged higher on Friday and were poised for weekly gains, as softer-than-expected US economic data overshadowed initial optimism from a rare phone call between President Donald Trump and Chinese President Xi Jinping.

Also Read: Rs 500 Notes To Be Discontinued? Here’s The Truth About it!

As of 05:48 GMT, spot gold rose 0.3% to $3,363.33 per ounce, while US gold futures advanced 0.4% to $3,387. For the week, bullion has gained 2.3%.

Investor sentiment was initially buoyed by the Trump-Xi call, which touched on trade tensions and critical minerals, but enthusiasm faded as persistent labor market weakness in the US took center stage.

“Some of the initial enthusiasm for risk appetite following the Trump-Xi call has started to wear off, which has enabled gold to creep higher,” said Tim Waterer, Chief Market Analyst at KCM Trade.

---

Jobless Claims, Fed Stance in Focus

US weekly jobless claims rose to a seven-month high, reflecting a cooling job market. The spotlight now shifts to the nonfarm payrolls (NFP) report, due at 1230 GMT, with economists forecasting a 130,000 job increase in May and unemployment holding at 4.2%.

Also Read: Home Loan EMIs to Drop by Over ₹1,500 as RBI Slashes Repo Rate to 5.5%

Waterer noted that a significant surprise in the NFP data could trigger a market breakout in gold prices.

Meanwhile, Federal Reserve officials emphasized that inflation remains a greater concern than employment softness, signaling no immediate interest rate cuts—conditions generally favorable for gold, which thrives in low-rate, high-uncertainty environments.

Also Read: RBI Slashes Repo Rate by 50 bps to 5.5%: EMIs Set to Drop, Real Estate Gets a Boost

---

Market Snapshot: Precious Metals

• Spot Silver: Down 0.7% to $35.92 per ounce, but near a 13-year high
• Platinum: Up 1.7% to $1,149.85
• Palladium: Up 0.7% to $1,012.60

All four precious metals are set to end the week higher.

However, high gold prices led to reduced physical demand in major Asian markets. India, in particular, saw discounts reach their highest level in over a month.

---

Tags:

Gold prices, US economic data, Trump-Xi talks, nonfarm payrolls, jobless claims US, Federal Reserve policy, gold weekly gain, silver price update, precious metals market, inflation vs employment