Analysis: US July non-farm payrolls unexpectedly decreased by 23,000, coupled with oil price fluctuations, driving gold to its best weekly performance in seven months.
This week, the gold market was supported by two macroeconomic forces. On Friday, the U.S. July non-farm payrolls report showed an unexpected decrease of 23,000 jobs, significantly lower than the market's expectation of an 80,000 increase. This caused market expectations for a September interest rate hike by the Federal Reserve to plummet from approximately 55% to 40%, thereby pushing down the dollar and government bond yields, opening up upside for gold prices. Meanwhile, geopolitical tensions surrounding the Strait of Hormuz triggered significant volatility in crude oil prices, with Brent crude briefly returning above $83 per barrel, continuously stirring inflation expectations and providing a hedge demand for gold. The combination of these two forces propelled gold to its best weekly performance in seven months, with a single-day gain of over 4% on Wednesday. Furthermore, since July 20, the total holdings of gold ETFs have increased by approximately 24 tons, indicating that institutional funds are once again including gold in their allocations.
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