Gold Prices Surge Amid Deepening Rift Between State Buyers and Western Funds
Gold prices have surged to their highest level in months, but beneath this rally lies a deepening rift between state buyers and Western funds. The yellow metal settled at $4,401.40 per troy ounce on Friday, representing a 2.37 percent gain on the day and a 7.39 percent climb for the week.
The recent jobs data has scrambled expectations around Fed Chair Kevin Warsh, with traders now pricing just a 44 percent probability of a September rate hike down from 57 percent before the data landed. This repricing is significant for gold as it reduces the opportunity cost of holding bullion, shifting the market toward betting on a pause rather than further tightening.
Central banks have been major buyers of gold in recent months, with official institutions adding a net 288.9 tonnes of gold in Q2 2026, a 62 percent jump year-on-year. This state-led demand provides a buffer against pullbacks, even if Fed expectations reverse course.