Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets—and may continue to in the future.
Here’s what you need to know:
Gold prices surged to a record high of $3,585/oz following a weak August Jobs Report.
The NFP number came in at just +22K, far below the +75K expected, increasing expectations of a September rate cut.
Concerns over Fed independence and a leadership shakeup at the BLS added to gold’s safe-haven appeal.
Gold held above key levels throughout the week, supported by both monetary policy hopes and broader market instability.
So, What Kind of a Week Has it Been?
Gold trading and gold prices rocketed out of the gate on Tuesday after a long holiday weekend, as investors and traders already had an eye on positioning ahead of Friday’s August Jobs Report and next week’s updated inflation metrics. Almost immediately, gold spot prices, which had already been trending noticeably higher to end August, cut easily through an expected level of resistance at $3,500/oz.
Early Week Rally Fueled by Rate Cut Expectations
It’s been reasonable to surmise that this strong rally higher was based primarily on the market’s assumption that it would take a major upside surprise in Friday’s Jobs Report (say, an NFP above +125K vs. the consensus projection of 75K) to dull the current expectation that the Fed will finally announce 2025’s first interest rate cut later this month; a move expected to be a direct benefit to gold as a non-yielding investment.
It’s important to also understand, however, that this initial rally—and to a lesser extent the sharp rip higher we’re seeing on Friday—was also informed by the traditional appeal of gold as a bid for protection against uncertainties and instability in the other assets and global markets as a whole. The current primary driver of these concerns at the moment is, of course, recently serious questions about the future of Fed independence from the US’ executive branch, as well as concerns about the sudden change of management at the Bureau of Labor Statistics (BLS) following the US president’s displeasure with last month’s disappointing labor market data.
Market Holds Steady as Gold Gains Momentum
The market’s mood—at least as with respect to the next FOMC move and its implications for gold—really didn’t change over the course of the week, and so the yellow metal enjoyed a steady flow of buyers and support that kept gold comfortably above $3,520 once it had breached that level. By the early morning of Friday in New York, just ahead of the Jobs Report, gold spot traded steadily at $3,550/oz.
Jobs Report Miss Triggers Breakout to Record Highs
The August Jobs Report—specifically the NFP print—gave investors just what they wanted, at least in terms of keeping the door wide open for a September rate cut. New jobs added came in at just +22K, more than 50,000 below the already anemic consensus call of +75K. In response, gold prices have ripped higher in one of the first true “hockey stick” range-breakouts for the precious metal in nearly a year.
Gold spot immediately jumped more than $30/oz to $3,585, a new all-time high. Supporting the view that this spike is about monetary policy expectations and not just an acute reaction to one number, gold has never looked like giving back the majority of this rally through end-of-week trading or profit-taking. $3,600/oz has proved to be the point of resistance (for spot, although futures are now trading well beyond it), but the yellow metal appears to be just as well-supported at $3,590.
What’s Next: Inflation Data on Deck
How tangible the current ceiling and floor are for gold will be tested at the end of next week, with Thursday delivering updated consumer inflation numbers.
In the meantime, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I’ll see you back here next week for another market recap.