Gold traded on both sides of the $4,150 mark this week as investors balanced a softer US employment report against persistent bets that the Federal Reserve will tighten again by December. Spot gold rose 0.4% to $4,158.17 an ounce on Monday, while US December futures gained 0.6% to $4,186.40. The move came after the Bureau of Labor Statistics said September payrolls increased by just 29,000 and the unemployment rate edged up to 4.2%.
Traders responded by slashing the probability of an October Fed rate increase to about 22%, down from 64% a week earlier. Yet futures markets still priced roughly an 87% chance of a hike by December, signalling a delay rather than a cancellation of the tightening cycle. The 10-year Treasury yield remained around 5.26%, and the dollar stayed firm as the euro weakened on French fiscal concerns. Société Générale strategists described gold as caught between structural demand from central banks and exchange-traded funds and macro headwinds from a strong dollar and elevated rates.
Institutional and official-sector buying has been a major support. US-listed gold ETFs attracted about $3.8 billion in September after $7.9 billion in August, while globally physically backed gold ETFs drew $18 billion in August, the second-largest monthly inflow on record. World Gold Council data showed holdings reached a record 4,189 tonnes. China’s central bank added roughly 20 tonnes in August, its biggest monthly purchase since October 2023. Goldman Sachs analysts reiterated that strong sovereign demand underpins their $4,900 year-end forecast, though they warned that a sharp rise in Fed hike expectations could unwind speculative positioning.
A second set of data highlighted an unusual divergence: gold was trading near $4,143 and down about 4.2% for the year, but gold ETFs added 143,200 troy ounces on Wednesday, extending their buying streak to five consecutive trading days. Total ETF purchases in 2026 reached about 2.01 million ounces, worth roughly $598.9 million at the prior session’s spot price. Total known ETF holdings rose to 100.9 million ounces, the highest level since August 5, 2022. That pattern shows investors buying into weakness rather than cutting exposure as prices decline.
Key technical levels are now in focus. Holding the $4,100–$4,150 zone could open a rebound toward $4,250–$4,300, with $4,400 as the next upside target. A clean break below $4,100 would put the $4,000 psychological level back in play. The next major macro test is the September CPI release on October 14; softer inflation could strengthen the case for a longer Fed pause and push Treasury yields lower, while an upside surprise would do the opposite. Ongoing Middle East tensions continue to provide safe-haven support, even as regional crude exports and G7 stock releases have pulled oil prices lower.
