Gold Ticks Up From Three-Week Lows After U.S. Jobs Data

Gold prices edged up from three-week lows on Friday after data showed U.S. jobs growth was slower than expected last month even as the Federal Reserve signaled faster rate hikes, which sent bullion on track for a weekly fall.

Spot gold was last up 0.5% at $1,797.10 per ounce by 1:43 p.m. ET, while U.S. gold futures settled up 0.5% at $1,797.40.

“With less than expected jobs added in December, but with the unemployment rate in the U.S. falling back toward a multi-year low, it was somehow a mixed report for gold,” UBS analyst Giovanni Staunovo said.

Nonfarm payrolls rose by 199,000 jobs last month amid worker shortages, lower than a forecast of 400,000, with moderate job gains expected in the near term as spiraling COVID-19 infections disrupt economic activity.

“A stronger than expected print was more likely to have pressured prices lower, but a weaker print has not significantly altered market rate hike expectations,” Standard Chartered analyst Suki Cooper said.

“The gold price reaction suggests the market is more focussed on inflation risks ahead of the FOMC meeting.”

The dollar fell 0.6%, making bullion cheap for overseas buyers.

Gold prices earlier hit a low since Dec. 16 at $1,782.10 and were set for a weekly drop of about 1.7%, the biggest since the week of Nov. 26, as benchmark U.S. 10-year Treasury yields touched two-year high.

The Fed minutes released on Wednesday showed officials had discussed shrinking the central bank’s overall asset holdings and raising rates sooner than expected to fight inflation.

The metal is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion.

Spot silver edged up 1.1% at $22.39 per ounce, platinum dropped 0.6% to $958.95 per ounce and palladium climbed 3.2% to $1,933.20 per ounce.