NEW YORK — U.S. non-farm payrolls fell by 23,000 jobs in July, a sharp reversal from the 83,000 gain economists surveyed by Dow Jones had forecast. The miss immediately repriced Federal Reserve rate hike probabilities for the September meeting.
The CME FedWatch tool shows the probability of a September hike dropped to 41.9 percent, down from 55 percent before the report. Bond traders now price a higher chance of the Fed holding rates steady, pressing front-end Treasury yields lower.
Spot gold responded by rising past $4,250 per ounce. U.S. gold equities and gold-backed exchange-traded funds are on track for their best weekly performance in over a year.
Agnico Eagle Mines (AEM), Newmont Corporation (NEM) and Barrick Mining (B) all closed the week ending Aug. 7 at their highest levels in over a year. The SPDR Gold Trust ETF (GLD) recorded its strongest weekly gain since January.
Central bank buying provides a structural floor for prices. China's central bank posted its largest monthly purchase since late 2023, signaling continued institutional demand for bullion.
Global physically backed gold ETFs reversed two months of net outflows in July, adding 23.5 metric tons valued at approximately $2.97 billion, according to the World Gold Council. Year-to-date, global gold ETFs have now attracted $11.0 billion in inflows. Chinese investors accounted for $1.2 billion of that total, extending a buying streak that began earlier this year. The July rebound follows net outflows of $2 billion in May and $9 billion in June.
Inflation indicators remain elevated despite the cooling labor market. Energy price volatility tied to Middle East geopolitics and ongoing supply-side pressures are keeping price growth sticky, complicating the Fed's policy path.
The U.S. dollar came under pressure after the payrolls report as traders shifted toward a hold scenario. Analysts at UBS project gold could approach $5,000 per ounce by 2027, despite near-term volatility as markets digest incoming economic data.
