Gold Prices Steady as US Job Market Contracts

Gold prices steadied near $4,345 an ounce after the US jobs market experienced a surprise contraction in July. This labor market weakness lowered expectations for near-term interest rate hikes by the Federal Reserve System and triggered a 0.4% drop in the Bloomberg dollar gauge, increasing the appeal of the metal.

The People's Bank of China continued its long-term accumulation strategy, adding 640,000 ounces to its reserves in July, marking 21 consecutive months of growth. This activity, combined with increased inflows into gold-backed exchange-traded funds in China and bullish bets from hedge funds and money managers, supported the metal's biggest weekly gain since January.

Despite these recent recoveries, gold prices remain nearly 20% below the levels recorded before the start of the Iran war in February. Geopolitical instability continues to influence the market, as Iran and Oman have yet to reach a final agreement to reopen the Strait of Hormuz. Additionally, Houthi militants reported an attack on a Saudi refinery.