Gold hits seven-week high after weak US jobs data

Gold prices surged on Friday to their highest level in seven weeks after data showed an unexpected decline in US nonfarm payrolls in July, reducing expectations for an interest-rate hike and putting the precious metal on course for its strongest weekly performance in seven months.

Spot gold rose 2.3% to $4,336.11 an ounce, after jumping more than 3% earlier in the session to its highest level since June 17.

Gold is heading for its biggest weekly gain since January 19, having risen more than 7% since the beginning of the week. US gold futures also climbed 2.3% to $4,396.90 an ounce.

Weak jobs data

Data from the US Labor Department's Bureau of Labor Statistics showed that nonfarm payrolls fell by 23,000 jobs last month, following a downwardly revised decline of 20,000 in June. Economists polled by Reuters had expected payrolls to increase by 80,000 in July.

Lower energy prices, alongside reduced expectations for a Federal Reserve rate hike, are also weighing on the dollar and supporting gold prices.

According to LSEG data, interest-rate futures markets now price just a 43.9% probability of a rate hike in September, down from 57% before the employment report was released.

Meanwhile, the probability that the Federal Reserve will leave interest rates unchanged next month climbed to 60.4%, compared with 43.2% before the data.

UBS analysts expect gold prices to rise to $5,000 an ounce during the first half of 2027, according to a note released on Friday.

On the geopolitical front, US President Donald Trump told reporters that he believes the war with Iran will end soon.