Gold snapped a four-week losing streak this week, with COMEX gold rising 2.22% after weak U.S. jobs data cooled bets on a near-term Federal Reserve rate hike. Even so, institutions stay cautious: JPMorgan cut its price forecasts and warned gold could revisit the $3,500–$3,600 range.
Gold rose 2.22% on COMEX this week, ending four consecutive weeks of declines and posting its first weekly gain since late May. The rebound followed a weak U.S. jobs report that shifted market expectations for interest rates. For an asset that had just endured its worst quarter in 13 years, the move pulled gold back into the spotlight.
The catalyst came from U.S. employment data. Nonfarm payrolls added only 57,000 jobs in June, far below May's revised 129,000 and well under the 115,000 the market expected.
Markets reprice the Fed
Traders reacted before touching their equity positions. According to CME Group's FedWatch Tool, the implied probability of a 25-basis-point rate hike in September dropped from around 65% to 53.5%, with a broad consensus that rates stay unchanged in July. Remarks by Federal Reserve Chair Kevin Warsh also eased concerns about further tightening.
The report's larger implication was not the slowdown itself but the renewed pricing of an alternative path — that the Fed's next rate hike may not be as imminent as assumed. Still, one week does not reset the year: gold trades roughly 22% below its January high of over $5,709 per ounce.
Why 2026 broke the trend
The contrast with last year is stark. In 2025, gold rose 66%, driven by central bank buying, Asian physical demand, ETF inflows, and a market consensus around currency-depreciation trades. After 2026, that narrative unraveled as the dollar strengthened, inflation stayed elevated, and hawkish signals from new Fed Chair Volcker revived higher-for-longer expectations. Enthusiasm for AI investments also drew capital away from gold.
JPMorgan hands pricing back to the Fed
JPMorgan argues the gold market is reverting to its familiar mechanism, with ETFs again the marginal pricing force and ETF investors most sensitive to the Fed. The bank estimates that each one-basis-point rise in real rates cuts gold prices by roughly $20.
On that basis, JPMorgan lowered its forecasts to about $4,300 per ounce in Q3 and $4,500 in Q4, a 20% to 25% cut from prior estimates. It cautioned that if the economy strengthens and the Fed hikes earlier than expected, gold could fall below $4,000 and test the $3,500–$3,600 range. The bank still sees a full-year 2027 average of $4,775 per ounce if Asian demand recovers and the Fed eventually eases.
For now, the biggest shift is not the price bounce but who sets the price. The conversation has moved from central bank buying and de-dollarization back to employment, inflation, and interest rates — and control has returned to the Federal Reserve.
Source: Futu News
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