Gold Soars as Weaker Jobs Data Dents Rate Hike Bets

Gold prices surged to a seven-week high on Friday after an unexpected decline in US nonfarm payrolls for July dashed rate-hike hopes, according to Business Recorder. The unexpected drop in jobs sent the market reeling, with spot gold jumping 2.3% to $4,336.02 per ounce by 2:42 p.m. EDT (1842 GMT). This move marks the largest weekly rise since January 19 for bullion.

Bullion is set to post its largest weekly gain in seven months, with prices increasing more than 7% so far this week. US gold futures climbed 2.3% to settle at $4,399.70. The rate hike expectations were a major driving force behind the price surge.

Economists polled by Reuters had forecast an increase of 80,000 jobs in July, but the actual number was only 23,000 jobs. This weaker-than-expected data presents a scenario where the Fed is less likely to raise interest rates at its next meeting, according to David Meger, director of metals trading at High Ridge Futures.