Gold Soars as Central Banks Boost Demand Amid US Jobs Woes

The gold market is at an unusual intersection this week, where disappointing US jobs data collides with a quiet but significant shift in the physical geography of global bullion reserves. Spot gold has climbed 2.5% to $4,497.48 per ounce on Thursday, extending its recovery after briefly touching a three-week low. The ADP report showed the US private sector added just 38,000 jobs in August, the weakest reading since January and well short of economists' expectations.

The disappointing jobs data has reignited bets on Federal Reserve rate cuts, which typically boost gold's appeal as an asset with no yield. New York Fed President John Williams added to the dovish narrative on Thursday, suggesting tariff-driven inflation pressures are fading and that higher energy costs have yet to bleed into other service sectors.

However, the more significant story is playing out at the institutional level, where central banks purchased a net 289 tonnes of gold in the second quarter - 62% more than the same period a year earlier. This helped push global gold demand to a record $380 billion in the first half of the year.