Gold Rises to One-Week High as Weak U.S. Jobs Data Fuels Rate Cut Bets

Gold prices rallied on August 5, 2025, climbing to a one-week high as investors increased bets on U.S. Federal Reserve interest rate cuts following disappointing U.S. jobs data. Spot gold rose to $3,371 per ounce, while gold futures settled near $3,425, supported by a weaker dollar and falling Treasury yields.

The rally was driven by the July jobs report, which showed only 73,000 new jobs added in the U.S.—well below expectations. As a result, traders now see a 92% probability of a Fed rate cut in September, with markets pricing in up to 100 basis points of easing by the end of the year. Lower interest rates typically boost non-yielding assets like gold by reducing the opportunity cost of holding them.

Additional support for gold came from renewed geopolitical risks. The U.S. is reportedly considering new tariffs on Indian imports due to its continued purchase of Russian crude, heightening global trade tension and driving investors toward safe-haven assets.

Despite recent volatility in equity and currency markets, gold has maintained upward momentum amid a backdrop of macroeconomic uncertainty. Analysts note that further gains could be seen if upcoming U.S. inflation data confirms a weakening trend in the labor market and supports dovish Fed policy.

With central banks around the world diverging in their policy approaches, gold remains a key asset class to watch as investors hedge against inflation, rate cuts, and geopolitical friction in the second half of 2025.