Gold Prices Rally After Weak Jobs Report

By Amrith Ramkumar Features Dow Jones Newswires

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

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Gold for December delivery closed up 0.6% at $1,330.40 a troy ounce on the Comex division of the New York Mercantile Exchange, its highest close since September 2016. The precious metal had its best week since February, supported by geopolitical tensions and growing doubts about the Federal Reserve raising rates for a third time in 2017.

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 Fed 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 immediately after Friday's report, which also supported metals prices. A weaker dollar makes gold cheaper for foreign buyers.

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The WSJ Dollar Index, which tracks the U.S. currency against 16 others, pared earlier losses and was recently up 0.1%.

Among base metals, copper for December delivery closed up 0.6% at $3.1180 a pound. The industrial metal sits at nearly three-year highs after a summer surge, with confidence in the global economy supporting prices in recent weeks.

Copper has risen in eight straight weeks, its longest such streak since May 2006.

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

(END) Dow Jones Newswires

September 01, 2017 15:21 ET (19:21 GMT)