Gold Prices Rise as Soft US Jobs Data Cuts Fed Rate Hike Odds

Gold prices advanced on Friday after softer-than-expected US jobs data, but were still on track for a weekly loss of over 3%. The nonfarm payrolls rose by just 29k in September, significantly lower than the estimated figure of 89k. This led to a fall in Federal Reserve interest rate hike expectations.

The unemployment rate ticked up to 4.2% in September from 4.1% in August. The odds of a quarter-point rate hike later this month fell to nearly 23%, while those of the central bank holding rates steady surged to about 77%. Lower rate environments tend to strengthen non-yielding assets such as gold.

Bonds dumped again, despite the initial halt after the release of the jobs report. The 2-year Treasury yield had fallen 2.9 basis points so far this week, while longer-end maturities suffered due to a combination of oil-related inflationary concerns and ballooning fiscal debt.