PRECIOUS-Safe-haven gold rises on weak data, simmering uncertainty

Updates prices for market close

By Sherin Elizabeth Varghese

June 4 (Reuters) – Gold rose 1% on Wednesday, supported by a softer dollar and weak U.S. data, as investors grappled with mounting economic and political uncertainty.

Spot gold XAU= climbed 0.8% to $3,378.22 an ounce by 02:02 p.m. ET (1802 GMT), after rising as much as 1% earlier. U.S. gold futures GCcv1 settled 0.7% higher at $3,399.20.

The U.S. dollar index .DXY fell 0.5%, making gold cheaper for buyers holding other currencies, while benchmark U.S. 10-year Treasury yields US10YT=RR edged lower. USD/US/

“The U.S. services sector – two-thirds of the economy – contracting for the first time in a year has goosed gold a percent higher after bullion had shrugged off a weak though historically volatile ADP employment report,” said Tai Wong, an independent metals trader.

“A close back above $3,400 will prime a run for new all-time highs.”

The Institute for Supply Management said its non-manufacturing purchasing managers index dropped to 49.9 last month, the lowest reading since June 2024, while ADP data showed U.S. private employers added the fewest workers in over two years.

“There is considerable geopolitical uncertainty with Russia-Ukraine, Iran, Syria and China driving people to buy gold… and although traders may not expect gold to rise as quickly, there is still plenty of upside,” said Daniel Pavilonis, senior market strategist at RJO Futures.

U.S. President Donald Trump said his Chinese counterpart Xi Jinping was tough and “extremely hard to make a deal with”, just days after accusing Beijing of violating an agreement to roll back tariffs.

In addition, Washington doubled tariffs on steel and aluminum imports and urged trading partners to submit their “best offers” to avoid more import levies.

All eyes are on Friday’s U.S. payrolls report for clues on the Federal Reserve’s next move.

Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.

Spot silver XAG= was down 0.1% at $34.45, platinum XPT= rose 1.5% to $1,089.99, while palladium XPD= lost 1% to $1,000.55.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Shailesh Kuber and Pooja Desai)

((sherinelizabeth.varghese@thomsonreuters.com;))