Softer U.S. labour demand gives bullion a lift, even as rising yields and a hawkish Fed keep a $4,000 retest on the table
Gold pushed higher on Tuesday after fresh data showed U.S. labour demand losing momentum, with job openings falling to their lowest level since March. Spot gold was last trading at $4,166.10 an ounce, up more than 1% on the session.
According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), available positions fell to 7.08 million in August from an upwardly revised 7.34 million in July (AP). The reading also missed expectations, with economists having forecast openings of around 7.23 million. It was the lowest level since openings hit 6.9 million in March.
Beneath the headline, the report was more mixed. Hires edged up to 5.19 million from a revised 5.15 million in July, while layoffs and discharges fell to 1.64 million. Quits held broadly steady at 3.1 million, pointing to a labour market that is cooling in demand without shedding workers.
The data matters for gold because it goes to the heart of the Federal Reserve’s policy outlook. The Fed raised its benchmark rate by 25 basis points to a 3.75%–4.00% range on September 16, its first hike since 2023, and signalled another increase could follow this year (Federal Reserve; CNBC). Analysts noted late last week that weak employment figures could have an outsized effect on bullion by prompting markets to scale back those hike expectations. A resilient jobs market has given the Fed room to focus on inflation, but continued deterioration could force policymakers to pause their tightening cycle.
Tactical headwinds, structural support
Tuesday’s bounce comes against a difficult backdrop. Surging bond yields and a firmer U.S. dollar have weighed heavily on gold in recent weeks, and some strategists warn prices could slip back toward $4,000 in the near term.
Aakash Doshi, Head of Gold Strategy at State Street Investment Management, told Kitco News that the recent selloff is no surprise given how sharply rate expectations have moved. Markets have priced in two additional hikes since mid-August, he said, with longer-dated expectations also shifting significantly. In his view, gold is reacting to a moment of peak market hawkishness, as higher nominal and real yields and a stronger dollar pressure the metal.
“The Fed hiking a couple more times, I do think that’s a tactical headwind for gold,” Doshi said, adding that high real yields make the path to $5,000 more challenging. Even so, he expects the $4,000 level to hold and still sees gold reaching $5,000 by the second quarter of 2027.
Doshi argued that higher rates do nothing to fix the long-term fiscal problems facing the U.S. and other major economies, and in fact make them worse by driving up the cost of servicing government debt. That, he suggested, helps explain gold’s resilience through a dramatic repricing in global bond markets. Before the pandemic, the U.S. 10-year Treasury yield sat around 1.5%. Few investors would have predicted that, six and a half years later, the 10-year could be near 5.3% while gold held close to $4,000, a divergence Doshi said highlights forces that go beyond gold’s traditional relationship with interest rates.
State Street’s September gold report emphasised that the reason yields are rising is what counts. Long-term term premia in the U.S., U.K., France and Germany have reached their highest levels since 2011, reflecting fiscal imbalances, sticky inflation risks and geopolitical uncertainty. U.S. public debt topped $40 trillion in August, with the most recent trillion added in roughly five months. Doshi pointed to three drivers behind the rise in term premia: questions over institutional credibility, persistent inflation, and fiscal deficits paired with heavier Treasury issuance.
Demand from East and West
Physical and investment buying continues to underpin the market, led by China. State Street noted that Chinese non-monetary gold imports hit a record 1,000 tonnes in the first seven months of 2026, up 78% year over year, despite local prices averaging around 45% higher than a year earlier.
Western investors have also kept buying into the weakness. Doshi said September ETF inflows show that strategic investors still see gold as a hedge against macro-policy uncertainty and risks to fiat currencies. That follows a strong August, when global gold-backed ETFs drew $17.1 billion in inflows and U.S.-listed funds took in $7.9 billion, their best month since September 2025.
Options positioning adds to the bullish case. Doshi noted that longer-dated volatility skews remain tilted to the upside, with investors continuing to favour upside exposure. State Street’s report said gold derivatives flows have moved from a put bias to a call bias, with calls becoming increasingly expensive relative to puts.
For now, the tug-of-war between a hawkish Fed and gold’s structural drivers looks set to continue, with each new piece of labour market data capable of tipping the balance.
Sources:
JOLTS report coverage (AP)
JOLTS component breakdown
Federal Reserve implementation note, Sept 16, 2026
CNBC on the September Fed decision
Kitco News interview with Aakash Doshi
