* US July nonfarm payrolls -23,000 vs 80,000 estimate
* US rate futures cut chances of September rate hike
* Silver, platinum and palladium head for weekly gains
By Sukanya Mitra and Swati Verma
Aug 7 – Gold surged on Friday, hitting its highest in seven weeks, after an unexpected drop in U.S. nonfarm payrolls for July dashed rate-hike hopes and set bullion on course for its best week in seven months.
Spot gold jumped 2.3% to $4,336.02 per ounce by 2:42 p.m. EDT , having risen more than 3% to its highest since June 17.
Bullion is set to post its largest weekly rise since January 19, with prices gaining more than 7% so far this week. U.S. gold futures climbed 2.3% to settle at $4,399.70. Nonfarm payrolls in the United States decreased by 23,000 jobs last month after a downwardly revised 20,000 increase in June, the U.S. labor department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast an increase of 80,000 jobs.
“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 U.S. interest rate increase portend to a weaker dollar and stronger gold prices, Meger said. The rate futures market has now priced in a 43.9% chance of Fed tightening in September, compared with 57% before the jobs report, according to LSEG data. The probability that the Fed will hold rates next month rose to 56.1% versus 43.2% just before the data release.
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. On the geopolitical front, U.S. President Donald Trump told reporters that he believed the war with Iran would be over soon.
Among other metals, spot silver gained 3% to $63.29 per ounce, platinum firmed 1.1% to $1,747.60, and palladium rose 0.8% to $1,381.61. All three metals were headed for weekly gains.
This article was generated from an automated news agency feed without modifications to text.
