Gold jumped above $4,360 an ounce on Friday, its highest level since June 17, after a surprise US payrolls contraction sharply cut the odds of a Federal Reserve rate hike in September. The metal posted its largest weekly gain since January 19 and its best week in seven months, and one major global bank now expects gold near $5,000 an ounce by the first half of 2027.
Gold surged past $4,360 an ounce on Friday, its highest level since June 17. The move followed a surprise contraction in US payrolls that sharply cut the odds of a Federal Reserve rate hike in September.
The metal rose more than 3% on the day. That extended a weekly advance marking its largest weekly rise since January 19, the best week for bullion in seven months.
Payrolls miss slashes rate-hike odds
The US Bureau of Labor Statistics reported that nonfarm payrolls fell by 23,000 in July, reversing a downwardly revised 20,000 gain in June and missing the 80,000 increase economists polled by Reuters had forecast. Rate futures now price roughly a 45% chance of a September hike, down from 57% before the report. The odds the Fed holds rates steady next month climbed to 56% from 43% over the same span.
Weaker dollar and $5,000 outlook lift bullion
Declining energy prices combined with the reduced likelihood of a near-term hike are together pointing toward a weaker dollar and firmer gold, a dynamic that has driven bullion's rally over the past week. Because gold generates no yield of its own, lower rates make it comparatively more attractive against yield-bearing assets such as bonds. The risk to this outlook is a hawkish reassertion from the Fed if upcoming inflation data surprises higher.
One major global bank said in a note on Friday that it expects gold to climb as high as $5,000 an ounce in the first half of 2027, citing the same combination of a softer dollar and lower real yields.
Source: Investinglive
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