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Gold futures ended lower on Friday, reversing earlier gains, as part of a general sell-off in riskier assets after a weak U.S. jobs report raised concerns that the Federal Reserve’s hold on interest rates could cause a real economic slowdown.
the prices U.S. stocks briefly rose early today after weak U.S. jobs data suggested the Federal Reserve was likely to ease interest rates, but that momentum was overshadowed by a stock market rout.
The United States added 114,000 nonfarm jobs in July, much less than expected, the unemployment rate rose to 4.3% from 4.1%, and average hourly earnings growth declined, all signs of a possible interest rate cut by the Federal Reserve next month.
While the malaise weighed on gold on Friday, analysts said the Fed’s more dovish approach Ultimately gold should strengthen..
“Risk flight in equity markets should be a net pressure on gold in the near term, but this is the first major weak jobs report in a year,” Nikki Shils, head of metals strategy at MKS BAM, told Bloomberg. “If it turns out to be a trend, it could mean multiple Fed cuts this year… a green light for new all-time highs for gold.”
COMEX August Gold Futures (XAUUSD:CUR) expired -0.4% Gold fell to $2,425.70 an ounce on Friday, down 1.5% from its 2024 settlement high of $2,462.40 an ounce hit on July 16; the December contract traded as high as $2,522.50 an ounce, the highest intraday price ever for a highly active contract, before settling at $2,425.70 an ounce. -0.4% At $2,469.80 per ounce.
COMEX August Silver (XAGUSD:CUR) contracts expired on Friday. -0.3% To $28.246 an ounce, down 12.3% from its year-to-date high of $32.205 an ounce on May 20.
Exchange-traded funds:New York, CA:GLD), (New York, Canada:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (Sil), (Sill)
Over the week, gold gained 1.9% as safe-haven demand rose due to tensions in the Middle East and expectations of a rate cut by the Federal Reserve, adding to the yellow metal’s appeal. Silver lost 1.4% over the week.
The 10-year Treasury yield and the Barclays Global Aggregate Bond yield hit their lowest levels since March, representing a “Gold prices rise “Because it is inversely correlated with returns,” said Tim Hayes of the Ned Davis Research Center. Market monitoringNoting that gold’s “competitive advantage” over bonds improves when yields fall.
If the economic and political environment becomes “more favorable for gold — for example, with increased weakness in the dollar due to lower interest rates — a range of $2,500 to $2,700 could be possible,” said George Milling Stanley of State Street Global Advisors.