Gold climbed on Friday, September 1, adding to its roughly 4% surge for August, after a closely watched snapshot of the U.S. job market revealed tepid late-summer hiring and almost no paycheck growth.
The report keeps alive the close debate over whether the Federal Reserve has a green light to raise interest rates again this year given still-concerning low inflation readings, including within wage data.
“A weaker-than-expected U.S. employment report that put strong selling pressure on the U.S. dollar index is boosting the precious metals markets,” said Jim Wyckoff, senior analyst with Kitco.
In response, December gold GCZ7, +0.19% added $6.80, or 0.5%, to $1,329.00 an ounce. It settled at $1,322.20 Thursday, its highest finish since Sept. 29 last year, according to FactSet data.
The most-active contract’s 4% August climb was the largest monthly gain since January. Gold finished at an 11-month high to close the books on August.
The U.S. created 156,000 new jobs in August, a lighter-than-expected increase, but chalked up in large part to regular seasonal slowing. Unemployment rose a tick to 4.4% from a 16-year-low 4.3%, the Labor Department said. Wages have risen 2.5% in the past 12 months, unchanged from July.
A weaker dollar makes gold more attractive to investors using another currency. But prospects for higher interest rates have other implications for gold; higher rates leave the nonyielding bullion less attractive compared to other assets. Thus, rate-hike skepticism has tended to boost the metal.
Gold prices have settled above the key $1,300-an-ounce level in each of the past three sessions, finding support from short covering, an increase in long positions and a generally positive price outlook for the metal as the dollar has wavered, analysts said.
Short covering refers to traders who sold futures contracts in a bet that prices would fall, then bought them back to close out positions.
“Technically, December gold futures bulls have the solid overall near-term technical advantage,” said Wyckoff. “A seven-week-old uptrend is in place on the daily bar chart. Bulls’ next upside technical objective is pushing prices above chart resistance at $1,350.00.”
As for others metals trading, a popular exchange-traded fund, the SPDR Gold Shares ETF GLD, -0.23% was up 0.1%, while the VanEck Vectors Gold Miners ETF GDX, -0.24% rose 0.5%.
Back on Comex, December silver SIZ7, +0.37% rose 10 cents, or 0.6%, to $17.6800 an ounce, while December copper HGZ7, +0.23% added about 1 cent, or 0.2%, to $3.106 a pound.
October platinum PLV7, +0.56% changed hands at $1,000.10 an ounce, up $1.50, or 0.2% but December palladium PAZ7, +1.10% added $10.15, or 1%, to $942.40 an ounce.
