Gold rebounds on weaker US jobs growth, eyes weekly gain

Gold turned positive on Friday, after falling as much as 1% earlier, as a weaker-than-expected U.S. nonfarm payrolls report weighed on the dollar and increased appetite for safe-haven bullion, putting it on course for a weekly gain.

Spot gold was up 0.1% to $1,519.96 per ounce, while U.S. gold futures gained 0.2% to $1,528.30.

The U.S. Labor Department’s monthly employment report showed job growth slowed more than expected in August, with retail hiring declining for a seventh month.

The dollar also dipped following the payrolls data, making gold cheaper for investors holding other currencies.

“Today’s jobs number missed expectations, causing gold to bounce higher. It just lends more credence to the fact that the job numbers are getting a little softer and it supports another rate cut by the U.S. Federal Reserve,” said Bob Haberkorn, senior market strategist at RJO Futures.

Federal fund futures implied that traders saw a 96% chance for a 25 basis-point rate cut from a current rate of 2.00-2.25% by the U.S. central bank this month.

Uncertainties around U.S.-China trade ties, fears of a deceleration in global economic growth and negative Treasury yields around the world were further supporting bullion, analysts said.

However, a planned resumption of trade talks between Washington and Beijing, and robust U.S. economic data on Thursday did re-ignite some appetite for riskier assets, pushing gold down more than 2% in the previous session.

“One move lower like what we saw on Thursday is not going to change the overall trend and what central banks are doing with interest rates, which over time is going to push gold higher,” Haberkorn said.

Bullion has risen about 19% so far this year.

On the technical front, “strong support remains at the $1,470 to $1,500 range, but it seems gold will settle comfortably above $1,500 for the week,” OANDA’s senior market analyst Edward Moya said in a note.

Other precious metals also pared losses with silver turning positive after falling over 3% earlier in the session, following Thursday’s 4.8% slump.

Silver was up 0.1% to $18.65 an ounce and was headed for its fifth straight weekly gain.

Platinum fell 0.1%, to $957.04, having shed about 3% earlier in the session, while palladium fell 0.7% to $1,548.50.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya