Spot Gold

Gold fell on Friday despite a soft September jobs report. XAU/USD touched $4,227 during the session, then sank back to about $4,138, a loss of close to 1% on the day, according to FXStreet's Christian Borjon Valencia. FXStreet attributes the drop to Treasury yields, which rose even as hiring slowed; higher yields raise the cost of holding a metal that pays no interest. The dollar index was down 0.14% at 101.89. Rate pricing cited in the report now leans toward the Fed holding on October 28, at about 77%, with the odds for December climbing to about 88%. FXStreet marks $4,100 as first support and the 100-day average near $4,279 as the level buyers would need to retake.

Bottom line (analysis): In our analysis, yields mattered more than jobs for gold on October 2. The metal gave back $89 from its high even with a weaker dollar, which is consistent with rates driving the price. FXStreet's levels frame the near-term range as $4,100 to $4,200. In its view, a break below $4,100 opens a move toward the July lows near $4,000, and buyers need $4,200 back to target the 100-day average at $4,279.

On the day of a weak jobs report, Chicago Fed President Austan Goolsbee told Fox Business that the labor market was steady and that "the inflation side of the Fed's job is more important." According to FXStreet's account of the interview, he wants to see evidence that inflation is heading back to the Fed's 2% target, he won't overreact to a single month of data, and both a hike and a pause remain possible at the next meeting. He declined to rule out any outcome.

Bottom line (analysis): In our analysis, at least one Fed official isn't treating one weak jobs number as a turning point. If inflation stays his priority, the debate is between another hike and a pause, not cuts. For gold, that keeps the focus on yields. The October 28 decision and the September CPI report before it are the next data points.

The greenback took a quick hit when September's payrolls report came in at 29,000. FXStreet's Joshua Gibson walks through the five-minute chart. The Dollar Index was sitting just above 102.10 before the release, dropped to around 101.80 within the first bar, and later made a session low just under 101.70. It then worked back to about 101.90, roughly the midpoint of its daily range. FXStreet attributes the move to a repricing of the Fed: markets now see only about a one-in-five chance of a hike on October 28, and the two-year Treasury yield, the most Fed-sensitive part of the curve, moved lower. With the euro making up 57.6% of the index, FXStreet notes, a smaller US yield advantage over Europe shows up quickly in DXY.

Bottom line (analysis): The dollar's drop after the jobs report was real but modest, about 0.4 points from the top to the low, and it had already recovered half of that by midday. In our reading, that's a market trimming October hike odds rather than abandoning a tighter Fed. For gold, a weak dollar only helps when long-term yields cooperate, and on this day they didn't.

US employers added just 29,000 jobs in September, less than a third of the 90,000 that forecasters expected, according to Bureau of Labor Statistics figures reported by FXStreet. Earlier months were revised down. August was cut to 133,000 from 162,000, and July flipped to a loss of 10,000 from an initial gain of 21,000. In the BLS's own words, "employment in July and August combined is 60,000 lower than previously reported." Unemployment ticked up to 4.2% from 4.1%, but participation also rose to 61.8% from 61.6%, which suggests some of the increase reflects more people looking for work. Wage growth cooled to 3.0% a year, under the 3.2% forecast. The dollar index slipped 0.23% to 101.80 right after the release.

Bottom line (analysis): The figures show slower hiring rather than broad job losses. By our calculation, revised payrolls averaged about 51,000 a month from July to September, and wage growth slowed. Participation also rose. After the report, market pricing cited by FXStreet moved toward a hold in October. In our analysis, that helps gold only if yields fall, and on the day they didn't.

On September 16 the Federal Open Market Committee voted 12–0 to raise the federal funds target by a quarter point, to a range of 3.75% to 4%. Its statement describes growth as solid, productivity as strong, and hiring as keeping pace with the workforce. It says inflation "remains elevated" and that the hike will support a timelier return to the 2% goal. The projections released the same day point the same way. Officials' median rate path now sits at 4.1% for both 2026 and 2027, up from 3.8% and 3.6% in June. Their median forecast for 2026 PCE inflation rose to 3.7%.

Bottom line (analysis): In three months the Fed raised its expected rate path by 0.3 to 0.5 point for each year from 2026 through 2028. In our analysis, that is a shift toward higher-for-longer. Tighter money tends to weigh on a metal that pays no yield, so data that could pull this path down matters for gold. The October 2 jobs report was the first major release since the meeting.