Gold prices moved higher on Friday as data from the Labor Department showing a smaller than expected increase U.S. non-farm payroll jobs addition in May raised hopes that the Fed will not hike rates anytime soon.
The dollar’s weakness and lower bond yields contributed as well to gold’s uptick.
The dollar index dropped to a low of 90.03 before recovering to 90.13, still down more than 0.4% from the previous close. The yield on U.S. 10-year Treasury Note dropped to 1.56%.
Gold futures for August ended up by $18.70 or about 1% at $1,892.00 an ounce. Gold futures, which shed about 1.9% on Thursday, lost 0.7% in the week.
Silver futures for July closed higher by $0.419 or 1.5% at $27.896 an ounce, rebounding well after losing about 2.6% in the previous session.
Copper futures for July settled at $4.5290 per pound, gaining $0.0660.
Data from the Labor Department showed non-farm payroll employment jumped by 559,000 jobs in May after climbing by an upwardly revised 278,000 jobs in April. Economists had expected employment to surge by 650,000 jobs compared to the addition of 266,000 jobs originally reported for the previous month.
The Labor Department also said the unemployment rate fell to 5.8% in May from 6.1% in April, while economists had expected the unemployment rate to dip to 5.9%. With the bigger than expected decrease, the unemployment rate dropped to its lowest level since hitting 4.4% in March of 2020.
Traders seem to be viewing the weaker than expected job growth as a “Goldilocks” situation, where the economy is expanding but not fast enough to encourage the Federal Reserve to tighten monetary policy.
A report released by the Commerce Department showed new orders for U.S. manufactured goods pulled back by more than expected in the month of April, sliding by 0.6%, after surging by an upwardly revised 1.4% in March. Economists had expected factory orders to edge down by 0.2% compared to the 1.1% jump originally reported for the previous month.
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