Gold Holds Gains on Weak US Jobs Data

Gold held above $4,100 an ounce on Friday after gaining more than 2% in the previous session, underpinned by weaker-than-expected US jobs data that prompted traders to scale back bets on Federal Reserve rate hikes. The US economy added just 57,000 jobs in June, the fewest in four months and well below forecasts of 110,000, while the unemployment rate stood at 4.2%. That followed a report on Wednesday showing private-sector job growth also came in below expectations. Fed funds futures now imply roughly a 50% chance of a September rate hike, down from 67% before the latest employment data. Fed Chair Kevin Warsh also said this week that inflation expectations are moderating while reaffirming the central bank’s commitment to maintaining price stability. Meanwhile, gold drew additional support from lower oil prices and easing inflation concerns as commercial shipping through the Strait of Hormuz continued to recover amid progress in US-Iran talks.

Gold prices jumped above $4,100 per ounce on Thursday, rebounding from an eight-month low, as markets scaled back expectations for Federal Reserve rate hikes following weaker-than-expected US jobs data. The economy added just 57,000 jobs in June, the fewest in four months and well below the 110,000 forecast, with leisure and hospitality shedding 61,000 jobs despite a World Cup tourism boost. The unemployment rate unexpectedly fell to 4.2% as workers left the labor force, while wage growth edged up to 3.5% year-over-year. Fed funds futures now price in less than a 50% chance of a September rate hike, down from 67% before the report. On Wednesday, Fed Chair Kevin Warsh noted easing inflation expectations but reaffirmed the central bank’s commitment to price stability. Gold also gained support from increased oil shipments through the Strait of Hormuz and progress in indirect US-Iran talks, which pushed oil prices lower and further soothed inflation concerns.

Gold increased 2% to 4111.92 USD/t.oz