Gold Falls Amid Weaker US Payrolls, But Central Banks Keep Demand Strong

The US employment report for September was weaker than expected, causing commodity markets to react. The report showed that payrolls outside the farm sector rose by just 29,000, short of economists' forecasts. As a result, gold prices initially spiked but then surrendered those gains, ending the session down 0.9% at $4,140.02 an ounce.

The data also revised down the prior two months by a combined 60,000, and the unemployment rate edged up to 4.2%. This led to a dovish shift in rate expectations, with futures markets slashing the odds of another Federal Reserve hike at the end of October.

Despite this, gold failed to capitalize on the rate cut expectations, as Treasury yields retreated immediately after the release and then rebounded into positive territory. Analysts point out that persistently elevated yields continue to dull the appeal of non-interest-bearing assets like gold.

However, there is a structural demand premium in place since 2022, which keeps gold supported above $4,000 even when US Treasury yields climb. Central banks have been driving this trend, with official institutions buying 288.9 tonnes of gold in the second quarter of 2026.