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Gold Finds Relief Above $4,223 As US Hiring Stumbles
Gold Finds Relief Above $4,223 As US Hiring Stumbles
Gold gained 1.1% after weaker-than-expected US employment data.
September hiring added 29,000 jobs, while earlier estimates were cut.
The report eased expectations of another Federal Reserve rate increase.
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Bullion remained about 1.5% lower for the week.
October 2, () – Gold climbed above $4,223 an ounce on Friday, October 2, as disappointing US hiring figures eased fears of another interest-rate increase, giving the metal some relief after a difficult week.
Spot gold rose 1.1% to $4,223.49 an ounce by 2.05 pm WAT, according to Reuters. Despite the rebound, it remained about 1.5% lower for the week. These were intraday prices, not closing figures.
Dollar image representation of reserves Photo credit Shutterstock
Hiring Weakens Beyond September’s Headline
The United States added 29,000 non-farm jobs in September, the Bureau of Labor Statistics reported on Friday. The unemployment rate stood at 4.2%, compared with 4.1% in August.
Revisions also weakened the picture for the preceding months. July’s previously reported gain of 21,000 jobs became a loss of 10,000, while August’s increase was reduced from 162,000 to 133,000.
Together, those revisions removed 60,000 jobs from the earlier estimates. They reflect additional employer reports and recalculated seasonal factors, rather than 60,000 newly announced redundancies.
Average hourly earnings increased by 0.1% in September and 3% over the year. The figures gave investors a softer reading of employment and wage growth as they assessed how much further the Federal Reserve might raise borrowing costs.
Why Gold Welcomed Bad Jobs News
Gold pays no interest. When investors can earn higher returns on interest-bearing assets, holding bullion becomes relatively less attractive.
A weaker employment report can support gold if it persuades traders that further rate increases are less likely.
Friday’s market response followed that pattern. Reuters reported that expectations of an October rate increase eased after the release.
That was a change in investors’ expectations, rather than a decision by the Federal Reserve.
Slower hiring does not settle the inflation outlook, however.
Policymakers still have to weigh employment conditions against price pressures, and one report cannot establish the path of future interest rates.
For Nigerian buyers, the dollar quotation is also only part of the calculation. The naira cost of gold depends on the exchange rate, while physical purchases carry dealer charges and differences in purity.
A rise in the international price therefore does not translate into an identical percentage return in naira.
Friday’s rebound recovered part of gold’s weekly decline. Sustaining it will require investors to remain convinced that the threat of higher interest rates is easing.