Disappointing Jobs Report Ignites Gold Rally as Wall Street Sentiment Flips Bullish
Wednesday, August 6th 2025
After a subdued summer, gold has roared back to life—riding the wave of weak labor data and reignited rate-cut hopes. The precious metal ended the week testing a critical resistance level near $3,350 an ounce, spurring widespread optimism among analysts
Though a technical glitch halted Kitco’s usual Main Street poll, the mood on Wall Street left little room for ambiguity: bulls are charging.
A Week of Reversals: From Economic Strength to Employment Concerns
At the start of the week, gold was under pressure. A stronger-than-expected 3% U.S. GDP growth in Q2 triggered selling as investors processed renewed signs of economic vigor. But that optimism proved short-lived.
Midweek, the Federal Reserve held rates steady. Fed Chair Jerome Powell delivered a non-committal tone on the future, stating, “We have made no decisions about September.” At the time, that stance weighed on gold.
But then came Friday—and with it, a seismic shift in sentiment.
Jobs Data Sparks Momentum Shift
The July U.S. nonfarm payrolls report shocked markets with its weakness. Only 73,000 jobs were created, far below expectations. What made the situation worse was the massive downward revision to May and June numbers, slashing previous gains by 258,000 jobs.
Economists immediately interpreted the figures as a clear signal that the labor market is no longer the “solid” pillar Powell claimed. The result: gold caught fire as traders began pricing in a September rate cut once again.
“The Fed’s case for holding rates has crumbled,” said Adrian Day, President of Adrian Day Asset Management. “This jobs data reignites pressure on the Fed. After recent softness in gold, this is the catalyst for a move higher.”
Analysts Strongly Bullish—No Bears in Sight
In the latest Kitco survey of 17 market analysts, not a single bearish vote was recorded.
Some, like David Morrison, adopted a more cautious stance. While he acknowledged the bullish impact of the employment data, he warned that gold might remain in a sideways pattern for now.
“We may need a ‘back and fill’ phase before gold can convincingly clear $3,400,” he noted. “Let’s remember, this price movement was driven by a singular, though significant, jobs data point. Momentum is building, but confirmation is needed.”
Still, Morrison acknowledged that technical indicators suggest room for further gains, with daily momentum having cooled from previously overbought levels.
Tariffs, Trade Tensions, and Global Currency Shifts Add Fuel
While economic data was the primary catalyst this week, global trade tensions are amplifying gold’s appeal as a safe-haven asset.
New tariffs imposed by the U.S.—as high as 35% on some nations starting in August—are driving fears of declining trade activity and reduced reliance on the U.S. dollar.
“Countries hit with new tariffs are likely to move away from using the dollar in trade. This boosts the long-term case for gold,” said Chris Vecchio, Head of Futures Strategies at Tastylive.com. “This weak jobs report may be exactly what gold needed to shine again.”
Countries facing steep import duties include:
- Canada: 35%
- India: 25%
- Taiwan: 20%
- South Africa: 30%
- Switzerland: 39%
Even recent deals with Europe and Japan didn’t stem the tariff tide—just softened the blow with increases capped at 15%.
Geopolitics and Presidential Strategy Drive Safe-Haven Demand
According to Darin Newsom of Barchart.com, the beginning of a new month—and a new round of tariff threats—adds another layer of volatility.
“This is textbook safe-haven territory for gold,” Newsom said. “Every time political pressure builds, the administration ramps up trade conflict. As long as that pattern holds, gold will find buyers.”
He also pointed to the December futures contract signaling a short-term uptrend, reinforcing bullish momentum.
What Lies Ahead: Targets and Expectations
Looking forward, analysts like Marc Chandler of Bannockburn Capital Markets believe the gold market may have found its bottom, thanks to a combination of slumping job numbers, a weaker dollar, and falling U.S. rates.
“If gold breaks above $3,375, we could see a push toward $3,440,” Chandler said. “The September cut now feels more likely, and there may be room for another move in Q4.”
Conclusion: A New Chapter for Gold?
Gold’s comeback this week wasn’t just about a single data point. It reflected the convergence of weaker fundamentals, renewed rate cut hopes, and deepening geopolitical unease. For now, the bulls are back—and they’re looking to reclaim higher ground.
