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Gold up on U.S. jobs report

Xinhua, September 3, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Friday as the U.S. jobs report gave support to the precious metal.

The most active gold contract for October delivery rose 9.6 U.S. dollars, or 0.73 percent, to settle at 1,323.20 dollars per ounce.

The U.S. Department of Labor released the big employment report for the month of August showing nonfarm payrolls increasing by 151,000 and the unemployment rate remaining steady at 4.9 percent. Analysts expected the unemployment rate to drop to 4.8 percent, a factor of the report which was worse-than-expected. Investors have reacted to the report negatively, despite the within-consensus figures, as expectations had rose after the stronger-than-expected weekly unemployment figures posted throughout the month of August.

The precious metal was given further support as analysts believe that the employment report may contribute to a delay in the Fed rate hike. Current expectations are that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CMEGroup' s Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 21 percent at the September 2016 meeting, 26 percent at the November 2016 meeting, and 54 percent at the December meeting.

The international trade report released by the U.S. Department of Commerce showed the trade balance level falling to a better-than-expected negative 39.5 billion U.S. dollars, a figure which analysts note put pressure on the precious metal as there were noted strength in exports.

Gold was prevented from rising further as the U.S. Dollar Index rose by 0.20 to 95.84 as of 18:45 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Silver for December delivery rose 42.3 cents, or 2.23 percent, to close at 19.366 dollars per ounce. Platinum for October delivery added 13.3 dollars, or 1.27 percent, to close at 1,062.2 dollars per ounce. Endit