At the close of trading on 3/7, the spot price of gold fell 31 USD to 3,325 USD per ounce. During the session, the price at one point dropped to 3,315 USD.

The market cooled after the US Department of Labor released a stronger-than-expected June jobs report. According to the report, the US added 147,000 new jobs, exceeding expectations of 110,000. This data reduces the likelihood of the US Federal Reserve (Fed) cutting interest rates soon. High interest rates make gold less attractive.

Gold prices fell sharply in the July 3 session due to the US jobs report, then partially recovered. Chart: Kitco

"The key here is that the possibility of a July rate cut is gone", said David Meger, Director of Metal Trading at High Ridge Futures. Investors are now forecasting the Fed will cut interest rates by 51 basis points (0.51%) by the end of this year, starting in October.

The positive results from the jobs report helped strengthen the US dollar. A stronger USD makes gold more expensive for buyers using other currencies.

However, Carsten Menke, an analyst at Julius Baer, believes that the US House of Representatives’ passage on 3/7 of President Donald Trump’s tax cut and spending increase bill will benefit gold in the long term. "As US public debt increases, investors will be more concerned about the dollar, which will push gold prices up," he explained. This bill could increase the US government's debt by 3,400 billion USD.

Meanwhile, the US stock market continued to set new highs thanks to the June jobs report. The S&P 500 and Nasdaq Composite rose 0.8% and 1% respectively, setting new records for the second consecutive session. The DJIA also increased 0.77% to 44,828 points.

Shares of chipmaker Nvidia rose 1.3%, pushing the company's market capitalization to 3,890 billion USD. During the session, the value of this chipmaker at one point touched 3,920 billion USD, higher than Apple's record of 3,915 billion USD.

Trading volume on 3/7 was low, as the US market shortened its operating hours to prepare for the National Day holiday. "The increase was mainly due to retail investors. They ignored inflationary pressures and import tax uncertainties, focusing only on the optimism from the jobs report", explained Kristina Hooper, market strategist at Man Group.

Ha Thu (according to Reuters, CNBC)