Gold Surges as Weak Jobs Data Slashes Fed Rate Hike Odds
By John Nada·Jul 4, 2026·2 min read
Gold surged to a 3-week high after weak jobs data slashed Fed rate hike odds for July, reducing the opportunity cost of holding bullion.
Gold hit a three-week high as June’s nonfarm payrolls severely underperformed, climbing by just 57,000 jobs, leading to a sharp reduction in the Federal Reserve’s rate hike odds for July.
According to GoldSilver.com, the CME FedWatch tool saw the probability of the Fed holding rates steady at the July 29 FOMC meeting rise to about 78%, cutting the chance of a hike to roughly 22%. This comes after the Bureau of Labor Statistics revealed a significant miss against the expected 115,000 jobs, with April and May revisions slashing an additional 74,000 jobs.
Jefferies senior economist Thomas Simons remarked, “The report gives the Fed no reason to act near term.” This sentiment underscores the market's reaction, as traders now anticipate a more patient Fed, leading to compressed real yields and therefore reducing the opportunity cost of holding gold.
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Gold traded at $4,174.42, up 1.23%, while silver climbed to $62.22, up 1.97%, marking their first weekly gain since late May, GoldSilver.com reported. This upward movement reflects how closely gold prices are tied to expectations of Fed policy changes.
The dollar index also felt the impact, dropping to about 100.8 from 101.4, hinting at the broader implications of a less aggressive Fed stance. As the People's Bank of China continues its gold reserve accumulation for the 19th consecutive month and the Silver Institute projects a continued supply deficit, the structural foundations for gold and silver remain robust, regardless of the Fed's next move.
With key economic indicators like June CPI and PCE on the horizon, investors will closely watch these releases to gauge future monetary policy directions. Yet the labor force participation rate's drop to 61.5%, its lowest since March 2021, adds a layer of complexity to the Fed's decision-making process.
Ultimately, while the jobs report has shifted immediate rate hike expectations, the strategic case for holding gold and silver transcends short-term data fluctuations. As Federal Reserve Chair Kevin Warsh noted, the July decision might yet become a "family fight," but for gold, the current landscape seems less contested.