Gold just had its best week in 7 months. Here’s why Mike Khouw is buying more

Gold jumped roughly 7% last week, logging its best weekly gain since January, driven by a weaker U.S. dollar, falling Treasury yields, and an unexpected contraction in employment data that reduced fears of aggressive Federal Reserve rate hikes.

(Note: the employment data wasn't that bad; layoffs were low, private employment climbed by 30,000, and the data was negatively skewed by the seasonal effect of ~50k fewer government education jobs) 

Key Drivers for Gold last week:

• Weak U.S. Jobs Data: Softer-than-expected nonfarm payrolls and downward revisions signaled a cooling labor market, prompting investors to seek safety.
• Macroeconomic Shifts: Declining Treasury yields and a softer U.S. dollar lowered the opportunity cost of holding non-yielding bullion.
• Inflation and Fed Credibility: Some market anxiety over future monetary policy decisions boosts safe-haven demand.
• Broader Precious Metals Rally: Strong upward momentum spilled over into silver, platinum, and palladium. Copper remains near the highs.
• The People's Bank of China (PBOC) is expanding its gold storage in Hong Kong to support the city's ambition to become a major international bullion-trading hub. This shift accelerates a broader trend of moving sovereign gold reserves back to the region from London and coincides with a 21-month buying streak that added 20 tons in July 2026 alone.

For the moment, gold remains below the 150-day moving average; the more leveraged way to play it — the gold miner ETFs GDX and GDXJ — are bumping up against it.

The key indicator is that Newmont Mining, the largest constituent of the gold miners, has broken through the 150-day moving average. To me, that suggests the others (GDX and GLD) will soon follow.

SPDR Gold Shares (GLD), YTD

From an options traders perspective, gold has a more symmetric "Volatility Smile" - meaning out-of-the-money calls have higher "implied volatility" than at-the-money calls do, which improves the payoff of a long call spread (debit spread) relative to a similar option strategy in the S&P 500.

For example, a November 400/460 call spread in SPDR Gold Shares (GLD) would cost about $16.15, just over 25% of the difference between the strikes (a total of $1,615 as each contract represents 100 shares), providing an upside payoff of almost 3:1 if GLD should rally another 15% over the next 100 days.