Gold Soars as Weaker Jobs Data Dents Rate-Hike Hopes

The US Federal Reserve's rate-hike hopes were dented after weaker-than-expected jobs data, causing gold prices to jump. This shift in expectations led to declining US Treasury yields and a softer US dollar, benefiting gold and silver rates.

The precious metals posted strong gains, with gold climbing to a seven-week high and silver reaching a six-week high by Friday. The employment report showed the economy unexpectedly lost 23,000 jobs in July, compared to expectations of an increase of about 80,000.

Ponmudi R, CEO at Enrich Money, noted that despite the shift in rate expectations, inflation remains a key risk, suggesting that the outcome of the next US Fed meeting will continue to depend on upcoming inflation and labour-market data. The weak report followed softer-than-expected ADP private payrolls data and a contraction in the ISM Services Employment Index.