Gold prices surged 2.3% on Friday to $4,340.70 per ounce after a disappointing U.S. jobs report, fueling a 7% weekly gain—the best since January. The Bureau of Labor Statistics revealed the economy shed 23,000 jobs in July, far below the expected 85,000 gain, igniting bets that the Federal Reserve will refrain from further rate hikes. UBS has set a bold $5,000 per ounce price target for gold in the first half of 2027, citing moderating inflation and expectations of stable rates in 2026 followed by cuts in 2027.
The macro shift has immediate implications for cryptocurrency markets. Bitcoin, often dubbed 'digital gold,' tends to benefit when real yields decline and the dollar weakens. The CME FedWatch tool now shows only a 42% chance of a September rate hike, down from 57% before the data. Lower interest rates reduce the opportunity cost of holding non-yielding assets, potentially driving fresh inflows into both gold and Bitcoin.
However, traders are now eyeing Wednesday's U.S. CPI report—a make-or-break moment. A softer inflation print would solidify the case for a dovish Fed and could propel Bitcoin above key resistance levels. Conversely, a hot CPI could revive tightening fears, pressuring crypto. Geopolitical tensions in the Strait of Hormuz add complexity; an oil price spike might lift inflation expectations, hurting both gold and crypto.
For gold-backed crypto tokens, the correlation is more direct. PAX Gold (PAXG) and Tether Gold (XAUT) are designed to track the price of physical gold, so Friday's rally and the UBS forecast provide a bullish backdrop. These tokens could see increased demand as investors seek blockchain-based exposure to the precious metal. As gold remains near multi-year highs, the interplay between traditional safe-havens and crypto assets will be closely watched.
