Stability of Gold Prices Amid Expectations of a Rise to $3,500 an Ounce

SadaNews - The price of gold stabilized after achieving its largest daily gains in two months during Friday's session, as investors continue to assess the impact of weak U.S. employment data on the Federal Reserve's interest rate trajectory.

The precious metal traded near $3,360 an ounce after rising by 2.2% in the previous session, while stocks declined. The rise in gold was driven by two main factors: the significant slowdown in the pace of employment in the U.S., which bolstered bets for interest rate cuts, and President Donald Trump's imposition of the heaviest tariffs since the 1930s.

Gold has gained more than a quarter of its value since the beginning of the year

Data from the Bureau of Labor Statistics showed that the U.S. economy added 73,000 jobs in July, while employment numbers for the previous two months were revised down by about 260,000 jobs. Hours after the report was released, Trump dismissed the head of the bureau in a move that unsettled the markets.

Gold has risen by more than 25% since the beginning of the year, supported by political turmoil in Washington and increasing geopolitical tensions around the world, which have boosted demand for safe havens. Investors and analysts believe that more gains are on the horizon, as central banks continue to buy and the likelihood of interest rate cuts increases.

As of 8:34 AM Singapore time, gold declined by 0.3% to $3,354.29 an ounce, while the Bloomberg Dollar Index remained stable. Silver fell by 0.4%, while palladium and platinum also declined.

Citigroup Raises its Gold Price Forecast

Citigroup raised its gold price forecast today for the zero to three-month period to $3,500 an ounce, up from a previous estimate of $3,300. The bank also adjusted the expected trading range to between $3,300 and $3,600, instead of the previous range of $3,100 to $3,500 over the next three months.

The U.S. bank also anticipated continued concerns regarding growth and inflation in the United States due to high tariffs in the second half of this year, which, alongside a weak dollar, will lead to a slight increase in the price of gold, reaching its highest levels ever.

It highlighted the weakness of U.S. employment data in the second quarter of 2025, as well as increasing worries about the credibility of institutions concerning the Federal Reserve, U.S. statistics, and rising geopolitical risks related to the Russian-Ukrainian conflict.

The bank estimates a rise in total demand for gold of more than one-third since mid-2022, supported by strong investment demand and moderate purchases by central banks, along with strong demand for jewelry despite rising prices.