Gold Edges Up As Jobs Data Favors Higher Interest Rates

(RTTNews) - Gold prices gained marginally on Thursday despite intensifying geopolitical tensions in Europe, as the expectations of further rate cuts dimmed after today's jobs data and Powell's cautious speech earlier this week.

Front Month Comex Gold for September delivery inched up by $4.80 (or 0.13%) to $3,736.90 per troy ounce.

Front Month Comex Silver for September delivery surged by 92.00 cents (or 2.10%) to $44.697 per troy ounce. Notably, silver settled at a new 52-week high today.

On the US economic front, data released by the Labor Department today revealed that initial jobless claims fell by 14,000 from the previous week to 218,000 on the third week of September; well below the market consensus. Outstanding unemployment claims edged down to 1,926,000 for the week ending September 13.

A report released by the Commerce Department today revealed that the economy expanded an annualized 3.8% in the second quarter of 2025, much higher than 3.3% in the second estimate, marking the strongest performance since third quarter of 2023.

The US Implicit Price Deflator for GDP increased at an annualized rate of 2.0% in the second quarter of 2025. The GDP Deflator measures the change in prices of final goods and services and is considered as a key indicator for inflationary pressures that provides insight into the future direction of monetary policy.

Quarter-on-quarter core PCE price growth slowed to 2.6% in the second quarter of 2025 from 3.5% in the first quarter of 2025. Quarter-on-quarter PCE prices growth slowed to 2.1% in the second quarter from 3.4% in the first quarter.

Nearly a week after the first rate interest rate cut of the year, US Federal Reserve Chair Jerome Powell said Tuesday that aggressive rate cuts could pose risks to inflation. He refrained from providing any clarity on when the Fed might next cut interest rates.

However, markets are fixated on two rate cuts this year and one early next year.

According to CME Group's FedWatch Tool, investors are betting on an 83.4% chance of a 25-basis-point interest rate cut at the October 28-29 meeting.

Investors are focused on Friday's report on inflation as measured by the Personal Consumption Expenditure index.

Meanwhile, US President Donald Trump recently said Ukraine has the capacity to reclaim the regions it has ceded to Russia. Trump's stance was seen leaning more towards Ukraine.

Ukraine's army stated that Russian forces launched more than 175 drone overnight targeting various infrastructures including electricity installations leaving the regions without power supply.

Traders feel that a direct military intervention by the US or its support to Ukraine in any other form could anger Russia and deteriorate the conflict, which would support the yellow metal.