Gold prices extended gains on Friday as weaker-than-expected U.S. nonfarm payroll data led investors to scale back projections for Federal Reserve rate hikes.
Benchmark spot gold rose 1.4% in Friday trading, reaching $4,182.15 per ounce, with U.S. gold futures advancing 1.68% to $4,194.92. Bullion appeared set for a 2.3% gain across the week, marking its first weekly increase since late May. Meanwhile, the dollar’s overall decline this week offered further support for precious metals markets.
Recent Labor Department figures showed the U.S. economy added 57,000 jobs in the past month, falling short of the 110,000 gain predicted by economists, while unemployment was reported at 4.2%.
Earlier, a separate release indicated that private payroll increases in June also lagged expectations. In light of these figures, market data from the CME FedWatch tool showed the probability of a rate hike by September fell to around 50%, down from 66% before the release.
Experts noted that diminished expectations for further monetary tightening tend to benefit gold, as the metal typically draws attraction in environments where interest-bearing alternatives look less attractive.
In a recent statement, U.S. Federal Reserve Chairman Kevin Warsh noted that both inflation expectations and related risks have eased in recent weeks, reiterating the central bank’s commitment to its 2% inflation objective.
Elsewhere, the World Gold Council reported a return to net official sector gold purchases in May, as central banks globally added 41 tons to their reserves according to the latest data.
Other precious metals also advanced, with spot silver up by 2.3% to $62.43 per ounce, platinum rising 2.7% to $1,660.05, and palladium gaining 1.3% to $1,284.40. All three metals reached their highest levels in more than a week and were positioned for weekly gains.
