Gold Soars on Weak US Jobs Data

Gold futures surged above $4,399 per ounce on August 7th as weak US non-farm payrolls data reduced expectations of a hawkish Federal Reserve stance ahead of its next interest rate decision.

The 2.33% gain comes after the Bureau of Labour Statistics reported a sharp downside surprise in July with Non-Farm Payrolls contracting by 23,000, a drop from the consensus expectation of 80,000 new jobs.

Consequently, the CME FedWatch Tool indicated that the implied market probability of a 25-basis-point interest rate increase fell from 54% to approximately 44%. Currently, FedWatch probabilities signal a 56% likelihood that the Federal Reserve will maintain benchmark interest rates unchanged at the current level of 3.75% during its September meeting.

Technical analysis reveals a robust long-term bullish trajectory for gold futures with a clear bullish market structure defined by higher highs and higher lows on daily timeframes.