Disappointing US Employment Data Makes Gold Price Shine

Gold prices rose to their highest level in six weeks in response to a disappointing US non-farm payroll data report that lowered expectations of an even more aggressive rate hike.

Launched Reuters page, Saturday (3/6/2017), the price of gold in the spot market rose 0.7 percent to US $ 1,274.39 per ounce. It’s the highest position since April 25, heading for a fourth-week gain. US gold futures rose 0.6 percent to $ 1,278.30 an ounce.

“This is not the kind of report people expect, and it puts pressure on the dollar and the yield, and gold is always happy to benefit from it,” said Georgette Boele, ABN AMRO Commodities Strategist.

Data showed US job growth slowed in May and employment growth in the previous two months was not as strong as previously reported, suggesting the labor market is losing momentum.

The sluggish economic recovery in the world’s largest country supports the possibility of higher interest rates that benefit non-interest interest such as gold.

He said that the data will cause investors to lower expectations of interest rate hikes this year and next year, pressing US dollar yields and US bonds and helping gold.

Expectations for stronger jobs data and optimism from US factory activity have pushed gold to a one-week low earlier on Friday.

“There’s a good room for the price to return to US $ 1,200 in the next three months,” said Dominic Schnider of UBS Wealth Management in Hong Kong.

Among other precious metals, palladium prices rose 1.4 percent to US $ 834.97 per ounce after earlier touching the level of US $ 835.90, the highest level since September 2014. Silver futures rose 0.7 percent to 17.39 per ounce and platinum gained 1 percent to $ 937.