Gold Rebounds From Its Worst Week Since June on Weaker NFP
By Martin Lam
Last Updated: October 5, 2026
Gold Movement Overview
On October 5, 2026, gold prices (XAU/USD) increased by 0.3%, reaching $4,153.66 per ounce. This rebound follows a significant decline, marking the worst week for gold since June. The uptick in prices is attributed to a weaker-than-expected US jobs report, which has eased market expectations for an imminent rate hike by the Federal Reserve. However, rising Treasury yields and oil prices continue to limit gold's gains.
Key Driver Behind The Move
The US nonfarm payrolls report revealed an increase of only 29,000 jobs in September, falling short of analyst expectations. This disappointing figure has reduced the likelihood of the Fed tightening monetary policy in the near future, with market expectations for an October rate hike dropping from approximately 70% to around 20%. As gold does not yield interest, lower odds of rate hikes enhance its attractiveness compared to interest-bearing assets.
Market Data And Reaction
Gold experienced a steep decline of 3.4% in the previous week, its largest weekly drop since June, and over 6% for the month of September, marking its worst monthly performance in that timeframe. Silver also saw a significant drop last week but rebounded alongside gold on Monday. Other precious metals, including platinum and palladium, also showed gains. The US dollar remained relatively stable after three weeks of gains, as the market continues to adjust to the new rate expectations.
Broader Market Implications
Despite the reduced likelihood of immediate rate hikes, inflation risks persist. Oil prices have surged due to escalating tensions in the Middle East, particularly following military operations by Saudi-backed forces in Yemen against Iran-backed Houthi forces. Additionally, Treasury yields remain high, with some nearing their highest levels in over two decades. US Treasury Secretary Scott Bessent has downplayed concerns regarding rising yields, suggesting they align with global trends. Elevated energy prices could sustain inflationary pressures, complicating the Fed's policy decisions even as the labor market shows signs of cooling.
What Gold Traders Should Watch
- Minutes from the Federal Reserve's September meeting, scheduled for release mid-week.
- Developments in the Yemen conflict and their impact on oil prices.
- Further commentary from the Federal Reserve regarding the policy outlook.
- Upcoming US economic data that may influence October rate-hike expectations.