Gold Holds Steady After Weak US Jobs Data Eases Rate Hike Pressure

Gold prices remained relatively stable on October 5, 2026, following their largest weekly decline since June. As of 1:14 p.m. in Singapore, spot gold dipped slightly by 0.1% to $4,137.38 an ounce. This comes after a significant 3.4% drop last week, as traders assessed the implications of a slowing US jobs market and rising bond yields on the Federal Reserve’s interest rate decisions.

The US nonfarm payrolls report for September revealed an increase of just 29,000 jobs, falling short of all economists' expectations. This data reduced pressure on the Federal Reserve to raise interest rates quickly to combat persistent inflation. Currently, market expectations for an October rate hike have dropped to around 20%, down from 70% a week ago. Higher interest rates typically diminish the appeal of gold, as the precious metal does not offer interest payments.

Despite the slower job growth, inflationary pressures remain a concern. Global benchmark Brent oil prices have stayed above $100 a barrel, and some bond yields have reached their highest levels in over two decades. Treasury Secretary Scott Bessent downplayed worries about high borrowing costs, noting they align with global trends. Fed officials have also downplayed the likelihood of an imminent rate hike, though minutes from the Fed’s September meeting, where rates were raised for the first time in three years, are expected to provide further insights.

Analysts point to elevated Treasury yields, currently around 5.2%, as a key constraint on gold’s recovery. Manav Modi, a commodity analyst at Motilal Oswal Financial Services Ltd., highlighted that persistent inflation, fiscal concerns, and heavy government borrowing continue to pressure bonds. Additionally, a stronger dollar poses another challenge for gold, making it more expensive for international buyers. Meanwhile, silver climbed 1.1% to $61 an ounce after a sharp 6% decline last week, while platinum advanced and palladium remained flat.