Gold Prices Extend Weekly Advance, Reach 2‑Month High
At 16:49 ET (20:49 GMT) on Monday, spot gold rose 1.1% to $4,389.17 per ounce, while gold futures climbed 1.1% to $4,448.55 per ounce. The spot price had surged 7.5% over the previous week and futures 7.1%, marking the highest levels in more than two months.
The rally was sparked by soft U.S. employment data. The latest jobs report showed the first monthly decline in non‑farm payrolls since February, driven mainly by a drop in local‑government education jobs, and a 103,000 revision downward for May‑June payrolls. This weakened expectations that the Federal Reserve would raise rates in September, easing pressure on a non‑yielding asset like gold and reducing dollar strength.
John Murillo, chief business officer at B2BROKER, explained that “the major moving force behind gold prices has been the Fed’s policy. Negative news on the US job market made it much harder for the Fed to conduct stricter monetary policy, so the market now expects much less that rates will be increased, and gold moved forward.” He added that if core inflation remains modest, gold could trade near $4,400, while a rise to $4,500 would require brighter job data, and a fall to $4,200 or lower would need higher inflation pressures.
Traders are now focused on key inflation indicators later in the week. The economic calendar lists the July Consumer Price Index (CPI) and Producer Price Index (PPI) on Wednesday and Thursday, followed by the July retail sales report on Friday. These data points are expected to shape further expectations for Fed policy and gold’s trajectory.
UBS maintained its $5,000 per ounce price target for gold, citing three structural pillars: a continued decline in real yields as the Fed eventually eases, dollar softness linked to U.S. fiscal and external deficits, and steady central‑bank buying that provides a price floor, which the brokerage believes will support gold through 2027.
Oil Market Context
Oil prices rose nearly 5% on Monday after Iran rejected direct talks with the United States and said a full reopening of the Strait of Hormuz would only occur after Washington meets certain conditions, including compensation for war damage. Iran’s parliamentary commission approved a management framework that would ban U.S., Israeli and other hostile vessels from the strait, with mechanisms for monitoring and compensation. Iranian Foreign Ministry spokesperson Esmaeil Baqaei noted that Iran and Oman have yet to finalize a joint statement on the framework.
President Donald Trump stated that Iran was demanding compensation for damages since the U.S.–Israeli joint assault on Tehran in February, and that he would also be demanding compensation from Iran in future negotiations.
Earlier in the week, crude benchmarks had fallen due to U.S. officials, including President Trump, suggesting ongoing talks with Iran, but the decline was tempered as Tehran continued to reject negotiation claims.
Contributors: Ayushman Ojha, Scott Kanowsky, Jaiveer Shekhawat