Gold Prices Rally After Weak Jobs Report

By Amrith Ramkumar Features Dow Jones Newswires

Jobs report breakdown: Here's who's hiring

The August jobs report showed smaller growth than expected. Cathy Barrera, ZipRecruiter's Chief Economic Advisor, shares insight on the report and which industries are hiring.

Gold prices rose Friday after the latest monthly U.S. jobs report came in weaker than economists expected.

Continue Reading Below

Gold for December delivery was recently up 0.5% at $1,329.00 a troy ounce on the Comex division of the New York Mercantile Exchange. Immediately following the report, the precious metal rose as high as $1,334.50 -- its highest level since September 2016.

Data released Friday showed the U.S. economy created 156,000 jobs in August, less than expected, while the unemployment rate ticked up to 4.4%. The weaker-than-expected report supported gold because many investors and analysts think soft economic data might make the Federal Reserve be more accommodative with monetary policy.

"The way the gold market is interpreting this is we're increasingly thinking that the Fed may not go another time in 2017," said Bart Melek, head of commodity strategy at TD Securities in Toronto.

A longer period without rate increases buoys gold because the precious metal struggles to compete with yield-bearing assets like Treasurys when borrowing costs rise. Division among Fed officials about when to raise rates has been one of the factors pushing gold prices to their highest level of the year in recent weeks.

The dollar edged lower after Friday's report, which also supported metals prices. A weaker dollar makes gold cheaper for foreign buyers. The WSJ Dollar Index, which tracks the U.S. currency against 16 others, was recently down 0.1%.

Continue Reading Below

Among base metals, copper for December delivery was recently up 0.3% at $3.1080 a pound. The industrial metal sits at nearly three-year highs after a summer surge, with confidence in the global economy boosting prices in recent weeks.

Write to Amrith Ramkumar at amrith.ramkumara@wsj.com

(END) Dow Jones Newswires

September 01, 2017 10:04 ET (14:04 GMT)