Gold, Silver Surge as Fed Rate Hike Odds Recover from Payroll Shock

The gold and silver markets experienced a surge on Monday as investors weighed in on last week's underwhelming jobs report. Despite the disappointing payroll numbers, firmer oil prices, rising Treasury yields, and renewed expectations for a Federal Reserve rate increase helped to boost gold and silver.

Spot gold rose 0.4% to $4,358.71 per ounce, while front-month silver futures settled at $65.106 per ounce, up 2.80% for the session. The market's reaction to the jobs report was tempered by the recovery of rate hike odds, which climbed back to 51.7% from a pre-release probability of 44.4%. This suggests that investors are still expecting a September Fed rate increase.

The Strait of Hormuz remains a key geopolitical flashpoint for inflation expectations, with Iran's stance dampening hopes for a swift reopening. As a result, oil prices advanced, and the knock-on effects were felt across markets, including firmer crude prices, higher Treasury yields, and a strengthened U.S. dollar index.