Gold Soars as Weak Jobs Data Dampens Rate Hike Expectations
Spot gold and silver prices surged on Friday as weak U.S. jobs data tempered expectations for Federal Reserve rate hikes, driving down Treasury yields. The unexpected contraction in July payrolls weighed on the dollar and bolstered gold, with spot gold rising 2.67% to $4,352.60 per ounce and spot silver increasing 4.20% to $63.970.
The jobs report released on Friday showed a decline of 23,000 nonfarm payrolls in July, alongside an unemployment rate of 4.1%. The data reduced the implied odds of a September Federal Reserve rate hike from 54.7% to 44.0%, according to Fed funds futures.
While gold benefited from the dollar's decline, energy-driven inflation risks remain on the Fed's radar due to ongoing tensions in the Strait of Hormuz. Oil prices were mixed as traders weighed deal headlines, but Brent crude has peaked at $113 during previous conflicts over the waterway.