Gold Soars 8% in Historic Weekly Gains Amid Weaker US Jobs Data

Gold's price surge over the past week has been historic, with an 8% gain in just five trading sessions. This marks one of the largest weekly gains for gold in nearly four decades, with only seven instances since 1986 where a similar increase occurred.

The weaker-than-expected U.S. jobs report released on Friday helped drive down expectations for interest rate hikes by the Federal Reserve. The ADP reported 44,000 private-sector jobs added in July, while the Bureau of Labor Statistics announced that nonfarm payrolls fell by 23,000 against forecasts.

The decline in interest rate hike bets sent gold prices higher, with spot gold trading at $4,370 an ounce on Friday. This price increase is also reflected in gold proxies, such as the VanEck Gold Miners ETF (NYSE: GDX), which skyrocketed 21% over the week.

Historical data suggests that strong weeks for gold often struggle to hold their momentum in the long term. One-month forward returns show a median gain of 2.4%, while three- and six-month returns are typically negative. However, twelve months out, gold has consistently finished higher in two-thirds of cases.