Investing.com – Gold prices rose on Friday supported by a dip in the dollar following a nonfarm payrolls report that undershot forecasts but gains were capped as bullish wage growth lifted expectations for higher inflation.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $3.64, or 0.29%, to $1,276.76. a troy ounce.
As was widely expected hurricanes Harvey and Irma disrupted labor market activity over the last month as Nonfarm payrolls fell by 33,000 in September, missing consensus estimate of 90,000.
The jobless rate fell to 4.2% while average hourly earnings topped expectations, rising 0.5% from the previous month. That fuelled expectations that a tighter labor market would spark a rebound in inflation, strengthening the Fed’s position to hike rates later this year.
Also lifting expectations of a year-end interest rate hike were comments from Atlanta Fed President Raphael Bostic who said the US central bank should raise rates again by the end of the year.
“We, in our forecasts of movements for the year, had said we expected three hikes in the course of 2017. I am still in that space,” Atlanta Fed President Raphael Bostic told Reuters in an interview on the sidelines of a Fed conference in Austin, Texas.
The precious metal, however, remained on track for a four-week losing streak as renewed hopes of tax reform and tighter monetary policy weighed on sentiment.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.
In other metals trading, silver futures rose 1.05% to $16.76 while platinum futures fell by 0.40% to $914.05.
Copper traded at $3.02, down 0.64%, while natural gas, fell by 2.02% to $2.87.