The yellow metal enters the weekend nursing a modest loss, its recovery from a brutal start to the week now resting on a knife’s edge ahead of next week’s inflation print. After briefly reclaiming the $4,500 threshold during a two-day rebound, bullion slipped back to $4,444.36 per ounce on Friday, down 0.6 percent on the day. The weekly scorecard shows a marginal 0.2 percent decline, though the monthly picture remains decidedly healthier with a 4.6 percent gain.
Friday’s session was always going to be dictated by the August nonfarm payrolls report, and the data delivered a surprise to the upside. The US economy added 162,000 jobs last month, blowing past the 53,000 to 58,000 range economists had penciled in, while July’s reading was revised upward to a gain of 21,000 from an initial print of minus 23,000. The unemployment rate held steady at 4.1 percent, matching expectations.
The market’s reaction was immediate and unforgiving for gold. Futures traders, who had been paring back bets on a September rate hike following dovish comments from Federal Reserve Governor Christopher Waller, reversed course. The probability of a quarter-point increase at the September 15-16 meeting jumped back to 59 percent on CME FedWatch, according to the latest positioning data. Treasury yields responded in kind, with the ten-year note climbing 3.2 basis points to 4.792 percent, while the dollar index added 0.3 percent to 99.3 points. Gold absorbed the blow with a 1.7 percent drop to $4,392.
The jobs data effectively undid the relief that Waller had provided just a day earlier. His signal that the Fed could hold rates steady if disinflation continues had knocked the market’s pricing for a September hike from roughly 63 percent down to about 50 percent, fueling a 2 percent surge in bullion on Thursday. That optimism proved short-lived, though the metal’s ability to hold above $4,400 despite the hawkish repricing suggests underlying support remains intact.
A Selloff With Roots in the Bond Market
Friday’s consolidation is merely the latest chapter in a turbulent fortnight that began with a sharp correction. On September 1, gold tumbled 2.86 percent to $4,325, with silver suffering an even steeper 3.73 percent decline to $64.13. The trigger was a global bond selloff that pushed ten-year US Treasury yields to roughly 4.79 percent, a move amplified by comments from Fed Chair Warsh that briefly sent rate-hike expectations soaring to around 70 percent.
Waller’s subsequent remarks helped restore equilibrium, and the rebound from those early-week lows has proven resilient. Over a 30-day horizon, gold still trades 4.3 percent higher despite Friday’s setback. The metal closed the week at $4,430.09, down 1.0 percent from Thursday’s settlement, leaving it a substantial 21 percent below its 52-week high of $5,598.58 set at the start of the year.
Central Banks Keep Building the Floor
Beneath the surface of rate speculation, the structural bid from official-sector buying continues to provide ballast. China’s central bank added 20 tonnes of gold in July, marking its 21st consecutive month of accumulation and lifting its reserves to a record 2,377.5 tonnes—60 tonnes purchased so far this year. Poland expanded its holdings by 82 tonnes to reach 632 tonnes, while the Czech Republic extended its buying streak to 41 months with a 2-tonne addition.
Should investors sell immediately? Or is it worth buying Gold?
The World Gold Council’s “Central Bank Gold Reserves Survey 2026,” conducted between February and May with responses from 76 institutions, underscores the durability of this demand. A striking 89 percent of central banks expect global gold reserves to rise over the coming twelve months, down from 95 percent in the prior year’s survey but still remarkably elevated. Perhaps more tellingly, 45 percent anticipate increasing their own holdings—a record high for the survey.
The 2025 numbers tell the same story at scale. Total demand reached 5,002.3 tonnes, surpassing the previous record set in 2024 and marking a fifth consecutive annual increase. For the first time, the investment sector’s 2,175.3 tonnes outpaced jewelry demand of 1,638.0 tonnes, while central banks contributed 863.3 tonnes to the total.
The Debasement Trade Lingers Beneath the Surface
Beyond the immediate rate debate, analysts point to a longer-term narrative that continues to attract investors to gold. With US government debt now exceeding $40 trillion and yields on thirty-year Treasuries at 5.23 percent, the so-called debasement trade—buying gold as insurance against currency erosion—remains a powerful undercurrent.
TD Securities maintains a price target of $5,350, though the firm cautions that such a level may be premature in the near term. MKS PAMP echoes that wariness, flagging the risk of speculative excess and headwinds from rising oil prices and interest rates.
What Comes Next
Technical positioning offers a mixed picture. Gold currently trades just below its 200-day moving average of $4,530.41, while sitting comfortably above the 50-day average of $4,244.26—a configuration that suggests the medium-term trend retains upward momentum even as the immediate path looks uncertain.
All eyes now turn to the consumer price index release on September 11, which market participants view as the decisive input for the Fed’s policy trajectory. Until then, gold remains caught between the pull of short-term rate speculation and the gravitational force of its structural demand story—a tension that has defined its price action all week and shows no sign of resolving soon.
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