Gold Climbs 1.3% to $4,174.08 as Soft US Data and China's Holiday Week Lift Demand Hopes

Gold settled at $4,174.08 an ounce, up 1.3%, as softer US job openings and confidence data cooled rate-hike bets ahead of China's Golden Week.

Gold snapped a bruising stretch on Tuesday, with the metal settling at $4,174.08 an ounce for a gain of 1.3%, as cooling US economic readings eased rate pressure and traders turned their attention to China's Golden Week shopping season.

The rebound followed a volatile run that had seen the metal briefly tumble as much as 4% on Monday to $4,111, according to Reuters reports, weighed down by climbing US bond yields and firmer oil prices that revived inflation concerns. Tuesday's softer data offered a measure of relief to rate markets and, by extension, to the non-yielding metal.

Job Openings and Sentiment Data Shift the Rate Calculus

The catalyst came from two US releases. Job openings fell to 7.079 million in August from a revised 7.335 million a month earlier, while the consumer confidence gauge slipped to 81.9 points in September.

That softening cooled investors' expectations for further tightening. New York Federal Reserve President John Williams stressed there was no urgency for immediate follow-up moves after September's rate hike. Market-implied odds of another increase in October promptly dropped from roughly 70% to about 50%.

Even so, the backdrop remains demanding for bullion. Yields on long-dated US Treasuries are still hovering near multi-year peaks, and Peter Grant of Zaner Metals, speaking to Reuters, characterized the latest advance as a technical countermove while pointing to persistent headwinds. Hawkish Fed signals just over a week ago had triggered a wave of selling.

China's Holiday Season Offers Seasonal Support

Attention now shifts to Asia, where dealers are banking on the Golden Week holiday running from October 1 to 7 to generate extra demand through festive purchases and restocking by retailers. The World Gold Council said the upcoming break could give the market fresh footing. While elevated prices and muted consumer confidence have weighed on jewelry demand so far this year, seasonal buying at the start of the holiday period is viewed as a dependable factor.

Christopher Tahir of broker Exness noted that lingering geopolitical tensions could keep energy prices and yields elevated, while signs of de-escalation would ease that pressure.

Central Banks and ETFs Underpin the Market

Beneath the short-term swings, institutional demand remains sturdy. The World Gold Council reported mid-month that the People's Bank of China added 20 tonnes to its official holdings in August — its largest monthly purchase since October 2023 — lifting the country's disclosed reserves to 2,387 tonnes.

Global financial investors have returned as well. Physically backed gold ETFs worldwide drew $18 billion in inflows during August, expanding their holdings by 121 tonnes to 4,189 tonnes.

Speculative positioning cooled slightly at the margin. Net long positions on the futures market stood at 225,900 contracts as of last Friday, down from 230,300 in the prior period, according to US Commodity Futures Trading Commission data.

PCE and Payrolls Loom as the Next Tests

Direction over the coming sessions will hinge on two key releases. Market participants are watching closely for the US PCE price index, the Federal Reserve's preferred inflation gauge, with the government's official employment report due at the end of the week.

Those figures will shape whether the central bank maintains its restrictive stance. Further easing in price pressure could open more room for gold to run; unexpectedly firm labor and inflation data would quickly revive bets on additional rate moves.

Despite the stabilization, gold remains roughly 25% below its 52-week high of $5,598.58. Major players nonetheless hold an optimistic view of the months ahead. Swiss banking giant UBS forecast on September 17 that gold could climb back to $4,600 an ounce by December 2026, and sees a level of $5,400 as attainable by September 2027 — a case built on the combination of seasonal holiday buying and steady central bank reserve accumulation.