International gold prices climbed more than 1% on Friday, positioning the market for its largest single-week advance since January, driven by cooling expectations for a Federal Reserve interest rate hike and easing inflation worries linked to a US-Iran peace deal, as investors await the release of US July nonfarm payrolls data. Meanwhile, analysts highlight that a technical 'cup and handle' breakout in silver could ignite a bull market rally.
Spot gold was trading at $4,318.94 per ounce, up 1.85% on the day, after hitting a seven-week high on Thursday. The metal has gained over 6.6% so far this week. US gold futures rose 1.9% to $4,380.90 per ounce.
Gold's short-term direction tied to Fed policy expectations
Kyle Rodda, a senior financial market analyst at Capital.com, stated: "Gold prices are essentially a derivative of Fed policy expectations right now. The marginal decline in the market's implied probability of a rate hike, combined with the view that Chairman Warsh may not be as hawkish as anticipated, is pushing gold higher." According to the CME FedWatch Tool, traders now see a 55% chance of a Fed rate hike in September, down from 67% last week.
On the geopolitical front, US President Donald Trump told reporters he believes the war with Iran will end soon. Crude oil prices are set for a weekly decline, helping to lower energy costs and easing inflation concerns, which in turn prompts investors to scale back bets on rate hikes. While gold is often seen as a hedge against inflation, its appeal tends to diminish in a high-rate environment because the metal yields no interest.
Nonfarm payrolls data could be a short-term pivot point
The US Labor Department will release its July nonfarm payrolls report at 8:30 p.m. Beijing time on Friday. Han Tan, chief market analyst at Bybit, noted: "If the US job market shows further resilience, gold could give back some of its weekly gains, with its 50-day moving average providing technical support. A strong employment report would also add upside risks to inflation and the Fed's interest rate outlook."
UBS maintained its long-term bullish stance, forecasting gold prices to climb to $5,000 per ounce by the first half of 2027. On the physical demand side, gold discounts in India widened this week as retail buyers held off purchases after prices rose to more than a one-month high, while activity in top consumer China also cooled.
Spot silver was trading at $64.37 per ounce, up 4.6% on the day, while platinum gained 2.4% to $1,770.15 and palladium rose 1.6% to $1,391.20. All three metals are on track for weekly gains.
Silver's 'cup and handle' breakout fuels bull market hopes
Veteran technical analyst Peter Brandt recently indicated in a chart that silver has broken out of its long-term 'cup and handle' pattern, which could signal further price gains. Brandt described the pattern as "the mother of all cup and handle formations," noting that the breakout has occurred and the current price is in a phase of retesting to confirm the breakout. He further asserted that silver prices "will go much higher," emphasizing that the key question is when the subsequent rally will begin.
The chart tracks Handy & Harman's spot silver price data dating back to the 1860s, revealing a multi-decade cup and handle formation with long-term resistance around $48 per ounce. This level corresponds to the January 1980 high of $48.00 and the April 2011 peak of $48.55. The chart also shows silver prices reaching $114.609 per ounce as of January 31, 2026. Brandt referenced silver futures contracts when publishing the chart.
Comments