Gold prices jumped early Friday after a closely watched reading of U.S. labor conditions in the U.S. for the month was much weaker than forecast.
June gold GCM21, 0.90% GC00, 0.90% was up $17.80 an ounce, up by about 1%, at $1,833.50 an ounce, coming after the U.S. Labor Department reported that the economy gained 266,000 jobs in April, far fewer than even the most subdued forecast for the month and raising some questions about the strength and pace of the recovery from the COVID pandemic.
Friday’s rise for gold comes after a 1.8% rally on Thursday, with the recent surge pushing the weekly advance for bullion to 3.9%. The commodity is trading at around the highest level since early February.
Jim Wyckoff, senior analyst at Kitco.com said that gold should see a “solid rally” on the back of the “much-weaker-than-expected NFP number.”
“This report at least temporarily throws some cold water on notions the Federal Reserve may be forced to raise interest rates much sooner than many expected,” the Kitco analyst said.
Indeed, Minneapolis Fed President Neel Kashkari, speaking on Bloomberg after the Friday jobs report, said that April surprise for jobs shows the importance of basing monetary policy on outcomes, not forecasts.