Gold Soars as Weaker Jobs Data Damps Rate-Hike Bets

Gold prices surged to their highest level in seven weeks after an unexpected drop in U.S. non-farm payrolls dented rate-hike sentiment and set bullion on course for its best week in seven months.

The Labor Department's Bureau of Labor Statistics reported a 23,000 job loss last month, contradicting economists' forecasts of an 80,000 increase. This weaker-than-expected jobs data has led to a reduced likelihood of the Federal Reserve raising interest rates at its next meeting, according to David Meger, director of metals trading at High Ridge Futures.

The probability of Fed tightening in September decreased to 43.9% from 57%, while the chance of holding rates steady rose to 60.4% from 43.2%. This shift in market expectations has contributed to a weaker dollar and stronger gold prices, making bullion more attractive relative to yield-bearing assets.

UBS expects gold prices to reach $5,000 an ounce by the first half of 2027. The precious metal's price jumped 2.3% to $4,336.11 an ounce, with spot silver gaining 3% to $63.31 per ounce, platinum firming 1.2% to $1,749.95, and palladium rising 0.8% to $1,380.53.