Gold Rises to $4,158 as Weak Jobs Data Cuts Fed Hike Odds to 22%

Spot gold rose 0.4% to $4,158.17 an ounce on Monday 5 October, after a September payrolls print of just 29,000 jobs cut the chance of an October Federal Reserve rate hike to 22% from 64% a week earlier. The move shaped the near-term gold price outlook before the Asian session was a few hours old.

The tension is hard to miss. The Fed raised rates by 25 basis points on 16 September, its first hike in three years, lifting the target range to 3.75%-4.00%, and gold is climbing anyway.

A December hike is still widely expected, so this is a pause in pricing rather than a change of cycle. Here is what the data tells you about where gold goes next, and which signals decide whether this rally holds.

Why a hiking Fed is not stopping gold: the jobs data and the rate repricing

The shortfall was stark. Employers added 29,000 jobs in September against a 12-month average of 45,000, and unemployment ticked up to 4.2%, or 7.1 million people, according to the Bureau of Labor Statistics (BLS).

Wage growth was soft too. Average hourly earnings rose 0.1% to $37.81, leaving annual growth at about 3.0%, the slowest since May 2021.

Then came the revisions. July was cut from a gain of 21,000 to a loss of 10,000, and August was trimmed from 162,000 to 133,000, removing 60,000 jobs in total.

That undermines the case that the labour market is holding firm. If earlier months were weaker than reported, the latest soft print looks less like a blip.

The transmission to gold is straightforward. Lower odds of near-term hikes cap bond yields and the US dollar, which reduces the opportunity cost of holding a metal that pays no interest.

The opportunity cost of holding bullion falls when yields soften, which is why gold tends to respond quickly to any repricing of near-term Fed expectations.

Tim Waterer, KCM Trade: The weaker labour data eased expectations for an October hike and supported gold, though markets still see the tightening cycle continuing.

Spot gold stood at $4,158.17, while December futures gained 0.6% to $4,186.40. Quotes vary slightly by contract and timing.

How FedWatch odds moved

The CME FedWatch tool, which converts futures prices into rate probabilities, now shows a 22% chance of an October hike, down from 64% a week earlier. That implies roughly a 78% chance of no change.

December tells a different story. One report put the probability of a hike at 87%, so the weak print delayed expectations rather than cancelling them.

For you, the shift means the market has moved from asking how fast the Fed will hike to asking how many more hikes remain. Gold’s current support sits in that gap, and it rests on expectations rather than a policy reversal. The Fed’s September vote was 12-0, hardly a committee losing its nerve.

Oil, Middle East tensions and the metals complex: what else is moving the gold price outlook

Conflict is not lifting oil, which is the odd part of this story. Yemen’s Saudi-backed government announced a large military campaign on Sunday 4 October to retake Houthi-held areas, and the Houthis are Iran-backed.

Oil still fell, as higher Middle East crude exports and a G7 oil release added supply. Specific WTI and Brent levels and release volumes were not available in the sources reviewed.

Waterer said Middle East events matter to gold through oil and inflation. When regional conflict fails to lift crude, the market is signalling that it worries more about slowing growth than about an energy-led inflation shock.

Gold was not alone on Monday:

Silver’s gain outpaced gold’s, and platinum and palladium rose with them. That breadth points to a macro-driven move, not a single safe-haven bid.

Gold does not always attract a classic safe-haven bid when conflict flares, and the muted link between Yemen’s escalation and prices reflects how often geopolitics matters through oil and inflation rather than fear alone.

Three forces are at work:

• Oil supply: Extra Middle East exports and the G7 release are pushing crude down.
• Gulf risk: Worries linger about further damage to Gulf infrastructure from the Iran war.
• Growth fears: Falling oil amid conflict suggests demand worries are dominating.

Falling oil supports gold as a hedge against uncertainty. It also means an energy spike could flip the Fed narrative quickly.

What could reverse the move, and what to watch next

One weak report is thin evidence, especially one carrying a 60,000-job revision. A few strong releases could re-anchor hawkish expectations, with December hike odds still high and unemployment stuck between 4.1% and 4.3% since March 2026.

The reverse case is instructive: gold has sold off sharply when labour market data surprised to the upside, which is exactly the risk if a few strong releases revive hawkish pricing.

The main risks are a stronger dollar, which raises gold’s cost for non-US buyers, and an oil spike that keeps the Fed hawkish. Crowded speculative positioning is a third, since it can force sharp corrections on upside data surprises.

There are offsets. Emerging-market central banks have been net buyers, citing dollar diversification and sanctions risk, which provides a structural floor.

Gold has also tended to improve when markets believe rates are near a peak. Research suggests this held after sharp payroll misses in 2015-2016 and 2019, though that pattern has not been independently verified and should be treated cautiously.

Tim Waterer, KCM Trade: Volatility is expected to stay high while oil, yields and Fed expectations remain unsettled.

No World Gold Council, bank or wire-service strategist views were available, so this outlook is conditional as of 5 October 2026. For you, the gold outlook hinges less on Monday’s gain than on whether upcoming data confirm cooling or revive hike pricing.

The watchlist:

1. Next US jobs and inflation data
2. CME FedWatch December odds
3. US dollar direction
4. Oil and Gulf developments
5. Positioning and volatility

What the weak jobs print changes for gold, and what it leaves open

The data lowered near-term hike odds and supported gold, but it did not end the tightening cycle. The path stays choppy and event-driven, and the single most important variable is whether the slowdown deepens or inflation re-accelerates.

Before the next Fed meeting, track the inflation and jobs releases and the December odds. Those will show whether pricing keeps drifting toward a pause or snaps back.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. These statements are speculative and subject to change based on market developments, and past performance does not guarantee future results.