Gold Rises Ahead of Key US Jobs Report

Gold prices rose to above $4,350 per ounce on Friday, the highest in two months as lower energy prices and softening labor conditions limited expectations that the Federal Reserve would deliver a rate hike this year. The US economy unexpectedly shed jobs in July while wages and the labor force participation rate fell, erasing any views that the strong labor market was inflationary. On top of that, energy prices lost some of the traction from previous sessions despite lingering uncertainty of a deal between Iran and the US to restore exports through the Strait of Hormuz. Treasury yields consequently eased, lifting bullion prices as markets faced lower opportunity costs to hold assets that bear no interest. Elsewhere, data from clearing institutions indicated that institutional investors in China continued to increase long position on gold-backed assets for safety from volatility in tech stocks and recent signs of strength in the physical market, recently underpinned by central banks.

Gold increased 2.01% to 4324.87 USD/t.oz

Gold climbed toward $4,300 an ounce on Friday, resuming its upward trend as investors awaited the closely watched US jobs report for fresh clues on labor market conditions and the outlook for Federal Reserve monetary policy. Markets remain divided over whether the US central bank will raise interest rates in September, although Fed officials have increasingly signaled a willingness to tighten policy soon amid mounting inflationary pressures. Investors also continued to monitor developments in the Middle East, as renewed tensions in the Strait of Hormuz pushed oil prices higher, reviving concerns about inflation and the prospect of near-term rate hikes. Elsewhere, data from clearing institutions showed that institutional investors in China continued to build long positions in gold-backed assets as a hedge against volatility in technology stocks, with demand also supported by continued central bank buying.