Gold prices continued their upward momentum on Thursday after a sharp decline in global oil prices helped ease inflation concerns, prompting investors to reassess expectations for the United States economy and future monetary policy.

According to Reuters, spot gold rose by 1.1 per cent to reach US$4,074.65 per ounce by 6:30 a.m. on Thursday (2 July). The precious metal had already climbed to its strongest level since 23 June during the previous trading session, extending a recent recovery after weeks of market volatility. Meanwhile, US gold futures for August delivery edged higher to US$4,087 per ounce, reflecting continued investor demand.

The latest gains came as crude oil prices fell to their lowest level in four months, reducing concerns that higher energy costs could fuel inflation. Lower oil prices often ease pressure on consumer prices, influencing expectations for central bank policy and boosting demand for traditional safe-haven assets such as gold.

Market sentiment was also shaped by weaker-than-expected employment figures from the United States. Data released for June showed that the country’s private sector added 98,000 new jobs, well below economists’ forecast of 118,000. The softer labour market data reinforced expectations that economic growth may be slowing, encouraging investors to seek the relative security of precious metals.

Following the release of the employment figures, the gold market rebounded from its weakest position in more than seven months. Analysts said the latest economic indicators have strengthened the view that financial markets remain highly sensitive to incoming data on growth, inflation and monetary policy.

Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery, said investors remain cautious about taking bearish positions in the gold market. According to him, recent trading patterns suggest that even when prices retreat, they have been recovering quickly, indicating resilient underlying demand.

Comments from Federal Reserve Chair Kevin Warsh also attracted close attention. He acknowledged that expectations and risks surrounding inflation have moderated in recent weeks. At the same time, he reiterated that the Federal Reserve remains committed to bringing inflation back to its long-term target of 2 per cent, signalling that policymakers will continue to monitor economic developments carefully before making future interest-rate decisions.

Market participants are now closely watching upcoming US economic data for further clues about the Federal Reserve’s next move. According to the CME FedWatch Tool, traders currently assign roughly a 66 per cent probability to an interest-rate increase in September, reflecting continued uncertainty over the direction of monetary policy.

The rally was not limited to gold. Other precious metals also recorded notable gains as investors broadened their exposure across the sector.

The combined impact of lower oil prices, softer employment data and evolving expectations for US monetary policy has reinforced demand for precious metals. Investors are expected to remain focused on forthcoming economic indicators, as these will play a crucial role in determining whether the recent strength in gold prices can be sustained in the weeks ahead.