Weekly jobless claims climbed to 206,000, signaling a labor market characterized by slow hiring rather than aggressive layoffs. This data, coupled with Waller’s indication that he would support holding rates steady if disinflation persists, has tempered market expectations for a September rate hike. Investors are now pricing in a 60% to 65% chance of an increase, down from the highs witnessed during the week's oil-and-yield turbulence.

Gold remains caught in a tug-of-war between defensive demand and persistent inflation risks. While lower Treasury yields provide a tailwind, the escalating conflict in the Gulf—marked by Iranian strikes near the Strait of Hormuz—has pushed Brent crude toward $97.33 a barrel. This surge in energy prices threatens to keep inflation elevated, potentially offsetting the benefits of a weaker dollar. Traders are now looking toward the ISM services report and Friday’s payroll data to determine whether this recovery will hold or if the precious metals complex remains vulnerable to further selling.