Gold Prices Soar on Weak Labor Market and Central Bank Buying
The gold market has made a strong comeback in recent days, with spot prices surging to their highest level in two months. The VanEck Gold Miners ETF (GDX) led the charge, jumping 21.09% over five sessions to close at $89.73. This rally was sparked by a weak US labor market report, which showed an unexpected decline of 23,000 jobs in July.
The poor jobs data and subsequent decrease in interest rate hike expectations pushed the dollar lower, making gold more attractive as a safe-haven asset. Additionally, exchange-traded fund flows into gold-backed ETFs turned positive for the first time in two months, with net inflows of 23.5 metric tons worth approximately $2.97 billion.
Central banks continued to accumulate reserves, with the People's Bank of China adding 20 tons in July, its largest single-month increase since October 2023. This systematic official-sector demand provides a structural floor under prices and reduces the risk of a deep correction in bullion.