Gold prices in the domestic market rose in tandem with the weekly closure of global exchanges, supported by the strong gains posted by the ounce over the past week, amid ongoing expectations that the Federal Reserve will cut interest rates, following weaker-than-expected U.S. nonfarm payrolls data.
The report noted that the local price increase came despite the halt in global trading, driven by rising demand in the domestic market alongside a noticeable shortage in raw gold supplies, particularly as a number of bullion dealers closed in conjunction with the Christmas holidays.
It added that the local market is experiencing a state of hedging and caution in anticipation of a new wave of price increases at the start of the week, especially in light of statements by U.S. President Donald Trump, which have contributed to heightened geopolitical tensions with certain countries.
Globally, gold prices continued to advance following the release of mixed U.S. labor market data, which showed job growth falling short of expectations. This reinforced investor bets that the Federal Reserve is moving toward cutting interest rates in the coming period, despite a slight decline in the unemployment rate.
Although short-term rate-cut expectations were negatively affected by some economic indicators, traders continue to believe that the Federal Reserve may lower interest rates by about 50 basis points over the course of the year.
Data showed that December’s nonfarm payroll figures came in below expectations, along with a downward revision to November’s data, while the unemployment rate declined and average hourly earnings matched forecasts.
Housing data also pointed to continued slowdown, as building permits and housing starts declined in October compared with November’s figures. Meanwhile, the preliminary reading of the University of Michigan’s Consumer Sentiment Index for January came in better than expected, despite persistent concerns among U.S. households about medium-term inflation.
Gold traders are closely watching a series of key U.S. economic releases in the coming week, most notably inflation data, retail sales, regional manufacturing indicators, and weekly jobless claims, in addition to speeches by Federal Reserve officials.
Gold prices were further supported by stable U.S. Treasury yields, with the yield on the 10-year Treasury note standing at about 4.171%.
A report from the U.S. Bureau of Labor Statistics showed that the economy added 50,000 jobs in December, compared with expectations of 60,000 jobs, and below the previous revised increase of 56,000 jobs.
Despite the slowdown in hiring, the unemployment rate fell to 4.4% from 4.6%, below expectations of 4.5%, easing concerns about a deterioration in the labor market.
In the housing sector, building permits declined by 0.2% in October to 1.412 million units, compared with 1.415 million units previously. Privately owned housing starts fell by 4.6% month-on-month to 1.246 million units, down from 1.306 million units in September.
The preliminary January reading of the University of Michigan Consumer Sentiment Index rose to 54 points, compared with 52.9 points at the end of November, exceeding expectations of 53.5 points.
One-year inflation expectations remained steady at 4.2%, while five-year inflation expectations rose to 3.4% from 3.2%.
Following the release of the U.S. data, the Federal Reserve Bank of Atlanta cut its forecast for U.S. GDP growth in the fourth quarter of 2025 to 5.1%, down 0.3 percentage points from the previous estimate.
In light of these developments, investors increased their expectations that the Federal Reserve will cut interest rates by about 56 basis points during 2026.
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