The scale of the payrolls miss, a 23,000 decline against a forecast 80,000 gain, is the clearest signal yet that the Fed has more room to hold or cut than markets had priced. With rate futures now showing roughly 45 percent odds of a September hike, down from 57 percent before the release, the dollar is likely to stay under pressure and real yields softer, both supportive for bullion. Gold's move above 4360 dollars an ounce and its best weekly gain since January points to fresh momentum rather than a one-off spike, particularly with one major bank flagging a path toward 5000 dollars by the first half of 2027. The risk to this view is a hawkish reassertion from the Fed if upcoming inflation data surprises higher, which would temper the dollar weakness this rally depends on. For AUD, a softer US dollar and firmer gold are typically supportive, though the read-through is partial given gold's move is being driven more by US rate repricing than by broader risk appetite.investingLive Americas market news wrap: Non-farm payrolls turn negative, dollar dropsA shock US payrolls contraction has traders slashing rate hike bets and sending gold to its best week in seven months.Summary:Spot gold jumped above 4360 dollars an ounce on Friday, its highest since June 17 and up more than 3 percent on the dayIts largest weekly rise since January 19, gaining more than 7 percent over the weekUS nonfarm payrolls fell by 23,000 in July, versus a downwardly revised 20,000 gain in June and forecasts for an 80,000 increaseRate futures now price roughly a 45 percent chance of a September Fed hike, down from 57 percent before the report, with hold odds rising to 56 percent from 43 percentDeclining energy prices and reduced rate hike odds are together weighing on the dollar and supporting goldOne major global bank said it expects gold to reach 5000 dollars an ounce in the first half of 2027Gold surged to a seven week high on Friday after a surprise drop in US nonfarm payrolls for July dashed hopes of a September interest rate hike, setting bullion on course for its best week in seven months. Spot gold jumped above 4360 dollars per ounce, up more than 3 percent on the day and its highest level since June 17.The US labor department's Bureau of Labor Statistics reported that nonfarm payrolls fell by 23,000 in July, a sharp reversal from a downwardly revised 20,000 increase in June and far below the 80,000 gain economists polled by Reuters had expected. The miss immediately reshaped rate expectations, with one analyst noting the weaker than forecast data makes the Federal Reserve less likely to raise rates at its next meeting.Declining energy prices alongside the reduced likelihood of a near term rate increase are together pointing toward a weaker dollar and firmer gold prices, a combination that has underpinned bullion's rally over the past week. Rate futures now price in roughly a 45 percent chance of Fed tightening in September, down from 57 percent before the jobs report, while the probability the Fed holds rates steady next month climbed to 56 percent from 43 percent beforehand. Because gold generates no yield of its own, lower interest rates make it comparatively more attractive against yield bearing assets such as bonds.Bullion's advance last week, more than 7 percent, was its largest weekly rise since January 19, underscoring how quickly sentiment has shifted on the back of softening US labor data. One major global bank said in a note on Friday that it expects gold prices to climb as high as 5000 dollars per ounce in the first half of 2027, citing the same dynamic of a softer dollar and lower real yields drawing investors toward the metal. With the September Fed decision now firmly in focus, upcoming inflation and employment releases are likely to be the next major test of whether this rally has further room to run. This article was written by Eamonn Sheridan at investinglive.com.