Gold Surges as Weak US Jobs Data Dents Rate Hike Bets

Gold prices surged on Friday to their highest in seven weeks after an unexpected drop in US nonfarm payrolls for July dashed rate-hike hopes. Spot gold jumped 2.3% to $4,336.02 per ounce by 18:42 GMT.

The weaker-than-expected jobs data presents a scenario where the Fed is going to be less likely to raise interest rates at its next meeting, said David Meger, director of metals trading at High Ridge Futures. Declining energy prices and a potentially reduced likelihood of US interest rate increases portend to a weaker dollar and stronger gold prices, Meger said.

Lower interest rates make gold more attractive relative to yield-bearing assets as bullion does not generate interest. UBS expects gold prices to climb to $5,000 per ounce in the first half of 2027, it said in a note on Friday.