Key Highlights
- UBS analysts project gold reaching $5,000 per ounce by the first half of 2027
- Precious metal surged 2.3% Friday following disappointing employment data showing 23,000 job losses in July
- Weekly gains exceeded 7%, marking the strongest performance since late January
- Robust demand from Chinese retail investors and ETF inflows supporting price momentum
- China’s central bank has maintained 21 consecutive months of gold acquisitions
The precious metal experienced a significant rally Friday as disappointing employment figures diminished market expectations for aggressive Federal Reserve interest rate policy. Gold advanced 2.3% to settle at $4,340.70 per ounce, marking its strongest close since mid-June.
According to the Bureau of Labor Statistics, the US economy shed 23,000 positions in July. This figure sharply contrasted with economist projections calling for 85,000 new jobs.
Adding to the weakness, previous months saw significant downward revisions. June’s employment gains were slashed to 20,000 from the originally reported 57,000, while May’s numbers were reduced from 129,000 to just 63,000.
Market participants swiftly adjusted their expectations following the release. CME Group’s FedWatch tool showed the likelihood of a September rate increase dropping from 57% to 42% after the employment data.
Major Investment Bank Projects $5,000 Threshold
Ulrike Hoffmann-Burchardi, UBS chief investment officer, outlined in a research note that gold’s upward momentum appears well-founded. The investment bank’s analysis points to prices hitting $5,000 per ounce during the first half of 2027.
The Swiss banking giant anticipates inflation will continue its gradual decline, enabling the Federal Reserve to maintain current rates throughout this year before implementing cuts in 2027. Reduced rate expectations would diminish real yields, weaken the dollar, and strengthen investment appetite for the yellow metal.
UBS strategists suggest any pullbacks near the $4,000 per ounce level could present attractive entry points for investors seeking long-term exposure.
Potential headwinds include escalating oil prices or markets repricing expectations for a more hawkish Fed trajectory. Both developments could enhance the appeal of fixed-income securities and create downward pressure on precious metal valuations.
Sovereign Purchases and Asian Demand Drive Market
Sustained central bank acquisitions have provided consistent underlying support for the precious metal. The People’s Bank of China has continuously added to its reserves for 21 months running.
During July, China’s monetary authority purchased 20 tons of gold, representing its most substantial monthly accumulation since October 2023, data from the World Gold Council shows.
Retail demand from Chinese markets combined with exchange-traded fund capital flows have contributed significantly to recent appreciation.
Silver likewise posted strong gains Friday, climbing 3.1% to $63.33 per ounce. This represented silver’s highest settlement since late June.
Over the full week, gold advanced 7.2%, representing its most impressive weekly showing since the period ending January 23. Silver jumped 10% for its strongest week since late February.
Year-to-date, gold prices remain approximately flat following a remarkable surge of more than 65% during 2025.
Investor attention will now shift to next week’s Consumer Price Index inflation data. Energy markets remain in focus as well, with no resolution reached between Washington and Tehran following hostilities that erupted in late February.
The SPDR Gold Shares ETF and comparable precious metal investment vehicles experienced sustained inflows corresponding with the price appreciation.
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