Gold jumped roughly 7% last week, its best weekly gain since January, after an unexpectedly weak U.S. jobs report cooled bets on aggressive Federal Reserve rate hikes. Options trader Mike Khouw is now playing for more upside with a call spread on SPDR Gold Shares, while investors watch Wednesday's inflation data to see whether the rally can extend.
Gold jumped roughly 7% last week, its best weekly gain since January, as a weaker dollar, falling Treasury yields and a surprisingly soft U.S. employment report cut the odds of aggressive Federal Reserve rate hikes.
Weak Jobs Data Undercuts the Dollar
Friday's employment report showed headline payrolls fell by 20,000, and revisions erased more than 100,000 jobs from earlier estimates, leaving average payroll growth over the past three months at only around 20,000. As a result, markets scaled back bets on a September Fed rate hike.
A softer U.S. dollar and falling Treasury yields also lowered the opportunity cost of holding non-yielding bullion. The rally spilled into silver, platinum and palladium too, with copper trading near its highs.
Central Banks and Iran Tensions Add Fuel
The People's Bank of China is expanding its gold storage in Hong Kong to support the city's ambition to become a bullion-trading hub, part of a 21-month buying streak that added 20 tons in July 2026 alone. Renewed friction between Iran and the U.S. over the Strait of Hormuz has also kept safe-haven demand elevated, with President Donald Trump saying Washington's economic pressure would eventually bring Tehran back to the negotiating table.
Gold Hits a Two-Month High as CPI Looms
Gold reversed earlier losses to touch a two-month high on Monday, with spot gold rising 0.4% to $4,357.03 an ounce while gold futures dipped 0.4% to $4,384.15 an ounce.
According to B2Broker's John Murillo: "I see gold trading closer to $4,400" if Wednesday's CPI report shows only modest inflation growth, since a jump to $4,500 would need brighter labor-market news too. Economists expect headline CPI to rise 0.1% month-on-month, lifting the annual rate to 3.4%, with core inflation forecast to hold at 2.5% annually.
UBS, meanwhile, maintains a $5,000 price target for gold, citing falling real yields, dollar softness and steady central-bank buying as structural supports through 2027.
Options Traders Bet on More Gains via Miners
Options trader Mike Khouw is using the rally to play for a breakout in SPDR Gold Shares. For now, GDX and GDXJ, the gold-miner ETFs, are testing their own 150-day moving averages, but Newmont Mining, the sector's largest constituent, has already broken through its 150-day average — a signal that suggests to Khouw the miner ETFs will follow.
As an example, a November 400/460 call spread in SPDR Gold Shares would cost about $16.15, just over 25% of the difference between the strikes, for an upside payoff of almost 3:1 if GLD rallies another 15% over the next 100 days.
Sources: US Top News and Analysis, Commodities & Futures News, Commodities Analysis & Opinion
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