Gold Extends Weekly Rally as Weak Jobs Data Shifts Fed Rate Expectations

Gold extended its rally on Monday, with spot prices rising 1.1% to around $4,389 after gaining 7.5% last week. The move followed a weaker U.S. jobs report, which showed payrolls falling in July and previous-month gains revised down by 103,000, prompting traders to reduce expectations for a September Federal Reserve rate hike.

The focus now shifts to July CPI and PPI, which could determine whether the recent repricing of U.S. rates has further room to run. At the same time, renewed uncertainty over the Strait of Hormuz has pushed oil prices higher, adding an inflation risk that could complicate the Fed’s policy outlook.

Trader outlook: Gold remains supported by softer rate expectations and safe-haven demand, but the rally faces a key test from U.S. inflation. Softer core inflation could reinforce bullish momentum, while a hotter reading could lift yields and the dollar, increasing downside risk for bullion.