Gold Prices Soar as US Jobs Report Misses Expectations by 70,000
The US economy added just 29,000 jobs in September, significantly lower than the expected range of 90,000 to 100,000. This miss has implications for the Federal Reserve's next interest rate hike, which is scheduled for October 28.
The jobs report was released at 8:30am ET on October 2, and within minutes, gold prices began to rise. Spot gold increased by 0.95% to $4,216.39, while silver jumped by 1.19% to $61.72.
The mechanism behind the metals' move is tied to real yields, which are influenced by labor market data and interest rate expectations. A weaker jobs picture reduces the likelihood of another Fed hike, leading to lower expected real-yield paths and making gold relatively more attractive.
Speculative positioning in gold futures was already near an eight-week high heading into today's data release. This suggests that some of the buying power behind the metals' move may have been spent before the number even hit.