US Jobs Report Sparks Fed Rate Uncertainty, Gold Prices Fall

US employers added only 29,000 jobs in September, far fewer than the 84,000 expected by economists. The unemployment rate rose to 4.2% from 4.1%, while the labour force participation rate edged up to 61.8%. The weak report sparked expectations that the Federal Reserve will keep interest rates unchanged at its October meeting.

The US economy's slowdown was also reflected in significant downward revisions to previous months. July payroll growth was revised from an initial increase of 21,000 to a decline of 10,000, while August growth was revised from 162,000 to 133,000. The combined employment gains for July and August were reduced by 60,000 from previous estimates.

The weak jobs report led to a fall in gold prices as a stronger dollar and higher Treasury yields outweighed earlier support from the weaker US jobs report. Spot gold declined 0.75% to $4,146.54 an ounce, while US gold futures settled 0.59% lower at $4,177.50.

US Treasury yields initially declined after the weak employment report but later reversed higher. The 10-year yield rose almost five basis points to 5.292%, while the 30-year yield increased three basis points to 5.642%. The two-year yield, which is particularly sensitive to expectations for Fed policy, rose five basis points to 4.841%.