Gold rises on weak U.S. labour data

• Set for weekly gains amid cooling yields

Business a.m.

Gold prices continued their steady ascent on Friday, bolstered by a cooling U.S. labour market that resulted in weakening dollar and Treasury yields. As market participants sought refuge in the yellow metal, gold prices extended their gains from the previous session, indicating the increased demand for safe-haven assets amidst the uncertain economic environment.

The precious metal’s march towards a fortnightly uptrend was further aided by heightened geopolitical tensions and trade war speculations. The impasse between Israel and Hamas and the possibility of fresh U.S. tariffs on Chinese imports served as potent catalysts for investors to seek shelter in the classic safe haven asset.

Spot gold recorded a 0.3 percent gain to $2,354.06 an ounce, while gold futures expiring in June marked a 0.9 percent surge to $2,360.75 an ounce. The precious metal’s prices, set to see their first positive week in three and a two percent weekly gain, glittered despite remaining below the heights attained in late-April. 

Riding high on the waves of a significant weekly increase in U.S. jobless claims, the precious metal soared on Thursday. The startling data, coupled with the unexpectedly soft nonfarm payrolls reading from April, sent shockwaves through financial markets, reigniting fears of a faltering labour market and prompting investors to flock to the safe haven of gold.

The financial realm reverberated with a flurry of activity as traders heightened their bets on the probability of a September rate cut. The CME Fedwatch tool, a widely-tracked barometer of rate cut expectations, revealed that traders have pumped up their projections of a potential September rate cut to almost 50 percent, signaling a major shift in sentiment.

Platinum prices also edged higher, gaining 0.2 percent to $994.80 an ounce, while silver prices soared with a one per cent jump to $28.657 an ounce. Both metals had an impressive week, with platinum shining with a three percent increase and silver recording a 7.4 percent surge. 

The dollar’s softening grip on the foreign exchange market proved to be an added boon for industrial metals, as a wave of weakness in the dollar buoyed the prices of copper and other base metals. On the London Metal Exchange, three-month copper futures climbed 0.5 percent to a robust $10,013.50 a tonne, while one-month copper futures scaled up 0.6 percent to $4.6327 a pound.