Investing.com -- Gold futures remained relatively unchanged on Friday, after the U.S. labor force rebounded in April from a dismal month in March.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery rose 6.10 or 0.52% to 1,888.30. Gold traded in a range of $1,181 to $1,192.60 during a lightly traded session. For the week, gold futures rose by more than $11 an ounce but less than 1%.
The U.S. Department of Labor said on Friday that nonfarm payrolls for the month of April increased by 223,000, slightly above forecasts for a 220,000 gain. The unemployment rate, meanwhile, fell by 0.1% to 5.4%, its lowest level since May, 2008 before the Financial Crisis. Nonfarm payrolls for March were also revised downward to 85,000 from an already paltry reading of 126,000.
Reaction in commodity markets, however, was generally muted as gold rose less than 1% from 1,184.40 to 1,191.30 in the 30 minutes following the jobs release. By comparison, gold surged more than 1.45% on April 6 to $1,218 an ounce as the soft employment figures heightened expectations of a delayed interest rate hike from the Federal Reserve.
In February the economy added 260,000 nonfarm jobs, building on strong gains over the prior two months amid increases in construction, goods-producing and food services positions. When the February report was released on Mar. 6, gold plunged more than 2.65% to 1,164.30 as the optimistic data signaled the possibility of a sooner than expected rate hike.
Last week, the Fed reiterated its data-driven approach to its first potential rate hike since 2006 by removing all calendar references to the timing of lift-off. Wary of a premature rate hike, the Federal Open Market Committee said it would like to see significant improvements with wage growth and upward movements in inflation toward its target goal of 2% before it decides to raise rates. While average hourly rates inched up by 1% in April, they have risen by 2.2% on a year-over-year basis. When the Bureau of Labor Statistics released its Employment Cost Index last week, it showed an uptick in wage pressures on a seasonally-adjusted basis.
Meanwhile, the labor force participation rate edged up 0.1% to 62.8% in April spurred by gains in professional and business services, healthcare and construction industries. The number of workers marginally attached to the labor force remained relatively unchanged over the past year, ticking down from 2.16 million in April, 2014 to 2.115 million last month. The reading is a gauge on the number of workers who have sought employment in the last 12 months, but stopped actively looking for work over the last four weeks.
In addition, there were 6.6 million part-time workers throughout the country in April, down from 7.4 million 12 months ago. The U-6 unemployment rate, a broader reading of the nation's labor condition, measures the total amount of unemployed Americans along with marginally attached and part-time workers. During testimony before the Senate Banking Committee in February, Fed chair Janet Yellen said the picture of the nation's labor condition was "less rosy," when the U-6 unemployment rate was examined.
Earlier in the week, Chicago Fed president Charles Evans said he needed to see more encouraging indications of economic growth before recommending a hike in interest rates. "The weak first-quarter data do give me pause, and I would like to see confirmation that they are indeed a transitory aberration." Evans said during an appearance in Columbus, Ohio.
A disappointing jobs report on Friday may have convinced the Fed to take a June rate hike off the table. The Fed may opt to wait until September or even December to increase its benchmark Fed Funds Rate.
Gold, which is unattached to interest rates or dividends, struggles to compete against high yield bearing assets in higher rate environments.
Elsewhere, silver for July delivery gained 0.186 or 1.14% to 16.483 a troy ounce.
Copper for July delivery rose by 0.001 or 0.04% to 2.919 a pound