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Gold prices firmed on Wednesday as weaker-than-expected jobs data fuelled expectations that the US Federal Reserve may cut rates sooner than expected, while investors also awaited upcoming non-farm payrolls data for further market cues on monetary policy.
Spot gold was up 0.3 per cent at $3,347.59 per ounce, as of 1246 GMT, while US gold futures rose 0.3 per cent to $3,358.10.
US private payrolls unexpectedly fell in June and job gains in the prior month were smaller than initially thought, the ADP National Employment Report showed.
After the data, traders increased their expectations to 67 basis points of Fed rate cuts this year, up from the earlier expectation of 64 basis points.
"The grimace-inducing -33k print in ADP private payrolls - the first showing net job losses since early 2023 is giving gold a nice bump," said Tai Wong, an independent metals trader.
On Tuesday, US job openings unexpectedly increased in May, but a decline in hiring added to signs that the labour market had shifted into lower gear.
Federal Reserve Chair Jerome Powell on Tuesday reiterated that the Fed is taking a patient approach to further interest rate cuts. But he did not rule out a reduction at this month's meeting, saying everything depends on incoming data.
That raises the stakes for the monthly non-farm payrolls report due on Thursday for more insight into the health of the labor market.
"If the payrolls report is terrible tomorrow, it's not inconceivable that a July cut could be possible," Wong added.
Gold, traditionally considered a hedge during times of uncertainty, also thrives in a low-interest rate environment.
Traders are also focussed on US tariff uncertainty ahead of the July 9 deadline. Adding to investor concerns, Trump’s massive tax-and-spending bill, expected to add $3.3 trillion to the nation's debt, is headed to the House of Representatives for possible final approval.
Spot silver rose 0.7 per cent to $36.33 per ounce, platinum was up 1.9 per cent to $1,375.91, while palladium gained 1.9 per cent to $1,120.87.