Gold climbed back above $4,170 an ounce as a weak US jobs report cooled bets on further Federal Reserve rate hikes. Bullion has rallied roughly $150 in 24 hours, putting it on course for its first weekly gain in five weeks.
Gold surged more than 1% on Friday, climbing back above $4,170 after a sharp turnaround in interest-rate expectations. The metal has rallied roughly $150 in the past 24 hours, on course for its first weekly gain in five weeks. It is up about 2.3% this week, snapping a month-long losing streak.
Weak jobs data resets the rate outlook
The catalyst was Thursday’s nonfarm payrolls report. The US economy added just 57,000 jobs in June, well below economists’ expectations of roughly 110,000, reinforcing signs that the labor market is losing momentum. Downward revisions for April and May added to the pressure on the dollar.
That softer picture prompted traders to trim expectations for future interest-rate hikes. Markets now see about a 54% chance of a September increase, down from 66% before the payroll report, according to CME FedWatch. Because gold pays no income, lower expectations for rate hikes reduce the opportunity cost of holding it.
Dollar softens, yields retreat
The US dollar and Treasury yields dropped as traders reduced the odds of a Fed move. The US Dollar Index fell to 100.75, while the 10-year Treasury yield was around 4.48% after reversing an earlier gain. A weaker dollar makes dollar-priced gold cheaper for buyers using other currencies.
But the case for another hike is not gone. The market still expects a September hike with 45.6% probability, per the FedWatch tool, and the dollar index remains above 100.
Central-bank buying underpins the metal
Beyond the rate story, central-bank accumulation continues to support gold, driven by a need for reserve diversification in a high-debt environment. Gold remains highly sensitive to incoming inflation and labor-market reports, a dynamic that keeps every print in focus for those weighing how to trade gold.
Sources: TradingView, FXEmpire, FXEmpire
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