Gold extended gains after a jobs report showed more Americans coming back to the labor market, a welcome sign for the Federal Reserve as it tries to cool inflation.
(Bloomberg) — Gold extended gains after a jobs report showed more Americans coming back to the labor market, a welcome sign for the Federal Reserve as it tries to cool inflation.
US nonfarm payrolls rose 315,000 last month, slightly higher than the median economist estimate. The dollar edged lower following the data release, boosting gold.
Hourly earnings rose slightly less than expected, while labor force participation increased to match a post-Covid high. The data will be welcomed by the Federal Reserve as it tries to ease price pressures by cooling the jobs market.
The increase in non-farm payrolls was broadly in line with expectations “and therefore doesn’t add much pressure on the US Federal Reserve to raise rates faster than the market already expected,” Capital Economics commodities economist Edward Gardner said in a message. “The gold price rose slightly on the news as the data release reduces the risk of faster-than-expected rate hikes going forward, which would raise the opportunity cost of holding gold.”
Attention will now turn to the central bank’s meeting later in September. Gold is still set for a weekly loss, and has fallen for five consecutive months on expectations the Fed will keep interest rates high for some time, undermining non-yielding assets.
Spot gold rose 0.6% to $1,708.36 an ounce as of 2:06 p.m. in London, and is down 1.7% this week. Prices fell to the lowest level since July 21 on Thursday. The Bloomberg Dollar Spot Index slipped 0.3% after a 0.7% gain in the previous session. Silver, palladium and platinum advanced.
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