Gold Rises to $4,345/oz as Weak Payrolls Cut Fed Hike Odds

Gold prices have risen to $4,345/oz after weak July payrolls cut September Fed hike odds from 57% to 44%, giving gold a rate-driven tailwind. The lower expectations for a Fed hike reduce gold's yield disadvantage compared to dollar deposits.

Central banks bought a revised 57 tonnes in Q1 despite Turkey's sizable March sale, and then surged to a record 289 tonnes in Q2, up 74% YoY. Reserve managers increasingly treat gold as an active reserve allocation, with 89% expecting global gold holdings to rise over the next 12 months.

However, a hotter-than-expected US Consumer Price Index could revive Fed hike expectations and strengthen the dollar, potentially putting pressure on gold through higher yields.