Will gold surge past $4,500 if US jobs data kills September rate hike bets?

Gold steadied near $4,477 an ounce on Friday, holding most of Thursday’s sharp rebound as investors waited for US payrolls data that could reshape expectations for the Federal Reserve’s September meeting.

Spot bullion was little changed at $4,477.10 an ounce in early Asian trading and was heading for a modest weekly gain. December US gold futures slipped 0.4% to $4,522.60.

The metal jumped about 2% on Thursday after Fed Governor Christopher Waller signalled he could support keeping rates unchanged if incoming inflation data continued to show progress.

Payrolls take centre stage for the Fed outlook

Friday’s jobs report is the immediate test for bullion because the market has become unusually sensitive to small shifts in rate expectations.

Fed funds futures imply roughly a 50% chance of a September rate increase, down from about 63% before Waller’s remarks, according to CME data.

Economists expect nonfarm payrolls to rise by around 56,000 in August, while unemployment is forecast to remain at 4.1%.

Waller said inflation was still above the Fed’s 2% target, but recent data suggested the disinflation process may be resuming.

He indicated that continued progress would favour keeping policy unchanged, while a hotter inflation reading could still justify tighter policy.

Saxo Bank head of commodity strategy Ole Hansen told FXStreet that gold remains highly sensitive to changes in expectations for the September Fed meeting because policymakers are offering little firm forward guidance.

A weaker-than-expected payrolls report could therefore support gold by reducing the likelihood of another rate increase. A stronger report could revive dollar and Treasury-yield pressure on the non-yielding metal.

Central-bank demand keeps support under gold

The broader demand picture remains one of gold’s main buffers against a deeper pullback.

The World Gold Council said central banks bought a net 289 tonnes in the second quarter, up 62% from a year earlier and the strongest second-quarter total on record. Poland led reported purchases, while China also increased its holdings.

That demand has become increasingly important as investors debate whether gold can hold elevated levels after a volatile year.

The World Gold Council expects central banks to remain significant buyers through the second half, although annual purchases may fall short of 2025 levels.

HSBC analysts, in comments reported by FXStreet, said the Fed may be reluctant to tighten again if higher energy costs do not spill over into core inflation.

That scenario would remove one of the biggest near-term headwinds for bullion.

Geopolitical risks remain part of the gold trade

Safe-haven demand also remains in the background as the US-Iran conflict keeps oil prices elevated and leaves investors wary of renewed inflation pressure.

Gold’s rebound on Thursday came alongside lower Treasury yields and a softer dollar, reinforcing the metal’s sensitivity to both monetary policy and geopolitical risk.

Front-month gold settled at $4,491.70 on Thursday.

Other precious metals were softer on Friday. Spot silver fell 0.3% to $66.78 an ounce but remained on course for a weekly gain. Platinum declined 0.8% to $1,811.28, while palladium slipped 0.4% to $1,415.75.