As the dollar and bond rates fell in response to lower U.S. nonfarm payrolls data, which once again raised questions about the pace of interest rate hikes beyond July, gold prices increased on Friday and were on track to post their first weekly gain in four weeks.
As of 2:06 p.m. EDT (18:06 GMT), the spot price of gold was up 0.8% at $1,926.54 per ounce. This week, gold has increased by 0.4%.
American gold futures ended the day at $1,932.50, up 0.9%.
The unemployment rate declined from a seven-month high despite reasonably good wage growth, according to figures from the labour department, even if nonfarm payrolls came in well below estimates last month.
Benchmark Following the release of the data, 10-year U.S. Treasury yields decreased from a more than four-month high, while the dollar fell 0.9% to a more than two-week low, making gold more appealing to holders of foreign currencies.
Traders still onto their bets that the Fed would increase interest rates this month, but they were growing less optimistic about the likelihood of increases in the future.
“Gold is still obstinately in demand and is trading higher even before the number. At least temporarily, today’s announcement has provided comfort to bulls, according to independent metals trader Tai Wong of New York.
“Gold should maintain its position above $1,910, but the $1,950–60 mark, where the 100 and 200 day moving averages are convergent, will be the true test. That kind of rally wasn’t necessary today since the report wasn’t strong enough.
The potential cost of storing non-yielding bullion increases as U.S. interest rates rise, and gold is sensitive to these changes.
However, this comes a day after another set of data revealed that the number of persons making new unemployment benefit claims climbed just slightly last week, although private payrolls jumped in June, demonstrating a continued solid labour market.
Furthermore, platinum increased 1% to $910.77, palladium up 0.6% to $1,248.66, and silver increased 1.5% to $23.08 per ounce.