Gold Surges to Best Weekly Performance in Seven Months Amidst Volatile Oil Prices and Weaker US Employment

Geopolitical tensions and a surprise decline in US nonfarm payrolls have sent oil prices into a volatile swing, boosting inflation expectations and reviving demand for gold. The July nonfarm payrolls report showed an unexpected fall of 23,000 jobs, far below the market's expectation of an 80,000 increase.

The combined effect of these two forces has propelled gold to its best weekly performance in seven months. In addition, ETF buying has picked up, with total gold ETF holdings rising by roughly 24 tonnes since July 20.

Oil prices have experienced sharp volatility this week, with Brent crude briefly climbing back above $83 per barrel. For every $10 swing in oil prices, inflation expectations are directly affected, which in turn influences the Federal Reserve's policy outlook and Treasury yields.