Gold Surges 7.35% After Weak US Labor Market Report
A recent surprise in the US labor market has sent shockwaves through the gold market. The metal surged by 7.35% last week, its strongest performance since January 2026, after a weaker-than-expected nonfarm payrolls report.
The data showed that jobs contracted by 23,000 in July, far short of the 80,000 gain economists had forecasted. This led to a downward revision of 103,000 jobs across prior months and hourly earnings rising just 0.1% month-over-month and 3.2% year-over-year.
The Federal Reserve's next move was also impacted by the report. Before Friday's release, a September rate hike had been seen as a possibility. However, with this data, that scenario has effectively been ruled out.
Gold benefited from the change in market expectations, with Treasury yields and the dollar index softening. Central banks, particularly China, continue to accumulate gold reserves, further supporting the metal's price.