Gold Futures Prices Surges as Dismal U.S. Jobs Report

Gold Futures Prices Surges as Dismal U.S. Jobs Report

Prices of gold futures gained more than 2%, its biggest leap day in over a month on Friday amid a broadly weaker dollar, as markets be largely excluded a rate hike from Federal Reserve after a dismal US jobs report on Friday morning.

On the Comex Exchange, Gold for August delivery traded between $1,209.50 and $1,245.75 an ounce, before settling at $1,241.95, up $29.35 or 2.42% on the session.

Spot gold was up 2.3 per cent at $1,238.85 an ounce.

Early Friday morning, the US Department Labor Office of Labor Statistics (BLS) said NFP increased by 38,000 in May, less than a quarter of analysts’ expectations of job gains of 158,000 a month. This marked the slowest monthly employment growth since September 2010 and raises doubts about the strength of the economy in general after a revised downwards 123,000 in April the total. As a result, the average of three months, hovering around 200,000 in early spring, it fell to 116,000.

Loss were focused on the information industries, which fell by 34,000, reflecting the six-week strike by union workers Verizon was resolved last week. Manufacturing remained weak, losing 10,000 jobs during the month, while employment in the construction sector fell by 15,000, a month after going in the industry crossing the largest amount of five years. In addition, work in the category of temporary help services, a leading indicator of future job growth, fell by 21,000.

In the meantime, the jobless rate was reduced by 0.2% to 4.7%, according to an estimated 500,000 Americans dropped out of labor force last month. The participation rate advanced 0.2% to 62.6%, while average hourly wage rates rose 0.2% in the month. The average workweek remained steady at 34.4 hours.

The Federal Open Market Committee (FOMC) left the target for its benchmark federal funds rank in each of its first three meetings remained unchanged in a range between 0.25 and 0.50% this year. Last December, the FOMC abandoned a policy of zero interest rates seven years by raising interest rates for the first time in nearly a decade.

Gold demand in Asia, home to the world’s largest consumer of gold bullion, mutes this week as a slightly higher in India and Japan was offset by reductions in other malls as buyers hoped for more price declines.

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