Gold jumped to $4,347.09 an ounce Friday, up 2.53% on the day and more than 6% for the week, after a weak July jobs report cut the odds of a September Fed rate hike to 46%. Options traders piled into bullish GLD and GDX calls, and foreign buying added to the bid even as prices sit well below January's record.
Spot gold surged to $4,347.09 per troy ounce Friday, up 2.53% on the session, after a weak US jobs report cut the odds of a September Federal Reserve rate hike. The move extended a weekly advance above 6%, the strongest since January, and pushed XAU/USD to a fresh seven-week high.
September hike odds collapse to 46%
The Fed's target range has held at 3.50%-3.75% all year, unchanged after three cuts in 2025. Two weeks ago traders priced a September hike at 63%; by Thursday that had fallen to 55%, and within minutes of Friday's jobs report it collapsed to 46%.
July's employment data triggered the repricing: the economy shed 23,000 jobs against a consensus of 80,000, while the unemployment rate ticked down to 4.1% from 4.2%. Combined May and June revisions also cut 103,000 jobs from the prior two months.
Because gold pays no yield, every basis point of expected tightening raises its opportunity cost — take a rate hike off the table and the arithmetic flips. Yet the setup stays precarious: three Fed officials dissented in favor of an immediate increase at the July meeting, and June CPI ran 3.5% year over year against a 2% target, so a hike remains live five weeks out.
Options traders bet the rally holds
Options desks moved fast behind the price action. Traders likely bought almost $100 million of call options in the SPDR Gold Shares (GLD) ETF on Friday, against about $25 million of puts, per SpotGamma data. Gold-miner ETF GDX saw a similar tilt, with over $80 million in calls bought versus just over $9 million in puts. Options volume in both surged, with GLD on pace for twice its 30-day average and GDX quadrupling its typical volume, according to Cboe LiveVol data.
Foreign buying added to the bid. According to the Arora Report's Nigam Arora, aggressive buying by Chinese individual investors in domestic gold ETFs helped trigger the bounce off the lows: "very aggressive buying by Chinese individual investors in the domestic gold ETFs". The catalyst appears to be Beijing's moves to make it harder for Chinese capital to move offshore, Arora said.
Central banks keep buying into the correction
The structural bid remains central-bank demand. Central banks added a net 289 tonnes to reserves in Q2 2026, a 62% jump year over year and the strongest Q2 in the data series, even as prices fell from Q1's record. That compares with 45 tonnes of net ETF outflows over the same quarter, concentrated in North America — central banks bought more than six times the volume ETF investors redeemed.
Still, the rally stays fragile. Gold sits about 25% below its January high. Spot sits 22.4% below the all-time peak of $5,602.225 set January 29.
The 10-year Treasury yield touched 4.7% earlier this week before stalling below its multi-year highs. A hot July inflation print due August 12 could push hike odds back toward 60% and unwind the move.
Sources: Commodities Analysis & Opinion, US Top News and Analysis
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