Gold hits seven-week high

Gold surged on Friday, hitting its highest in seven weeks, after an unexpected ‌drop in US nonfarm payrolls for July dashed rate-hike hopes and set bullion on course for its best week in seven months.

Spot gold jumped 2.3 percent to $4,336.02 per ounce by 2:42pm EDT (1842 GMT), ​having risen more than 3 percent to its highest since June 17.

Bullion is set ​to post its largest weekly rise since January 19, with prices gaining ⁠more than 7 percent so far this week. US gold futures climbed 2.3 percent to settle ​at $4,399.70.

Nonfarm payrolls in the United States decreased by 23,000 jobs last month after a downwardly revised ​20,000 increase in June, the US labor department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast an increase of 80,000 jobs.

"The weaker-than-expected jobs data presents a scenario where the Fed is ​going to be less likely to raise interest rates at its next meeting," said ​David Meger, director of metals trading at High Ridge Futures.

Declining energy prices and a potentially reduced likelihood ‌of ⁠US interest rate increase portend to a weaker dollar and stronger gold prices, Meger said.

The rate futures market has now priced in a 43.9 percent chance of Fed tightening in September, compared with 57 percent before the jobs report, according to LSEG data. The probability that the Fed ​will hold rates next ​month rose to ⁠56.1 percent versus 43.2 percent just before the data release.

Lower interest rates make gold more attractive relative to yield-bearing assets as bullion does not ​generate interest.

UBS expects gold prices to climb to $5,000 per ounce in ​the first ⁠half of 2027, it said in a note on Friday.

On the geopolitical front, US President Donald Trump told reporters that he believed the war with Iran would be over soon.

Among other metals, spot ⁠silver, ​gained 3 percent to $63.29 per ounce, platinum firmed 1.1 percent to $1,747.60, ​and palladium rose 0.8 percent to $1,381.61. All three metals were headed for weekly gains.