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Gold Squeaks out Weekly Gain After Mixed Jobs Report

October 5, 2018 at 13:35 by Andrew Moran

Gold futures, trading higher to kick off the final trading session of the week, are on track to squeak out a weekly advance. The yellow metal rallied after the US government reported that job growth cooled in September, but national unemployment is at its lowest since 1969. Can gold gain any momentum in the final months of 2018?

December gold futures rose $5.80, or 0.48%, to $1,207.40 per ounce at 13:02 GMT on Friday. Gold prices are poised for a modest 0.75% weekly gain, etching out its second consecutive weekly jump. Year-to-date, the precious metal is still down 9%.

Silver, the sister commodity to gold, is looking to be in the green at the end of the trading week. December silver futures tacked on $0.13, or 0.89%, to $14.72 an ounce. The white metal, down 15% so far this year, is looking to record a 0.1% weekly advance.

According to the Bureau of Labor Statistics (BLS), the US economy added 134,000 new jobs in September, the slowest pace in 12 months. The jobless rate plunged to a 48-year low of 3.7% and hourly wages climbed 0.3% to $27.24. With the holiday season around the corner, analysts are forecasting that the jobless rate will fall even further.

The data did not stimulate the US dollar as the greenback slipped 0.13% to 95.63. The buck is still getting ready to post a 0.5% weekly surge. A weaker currency is good for dollar-pegged commodities because it makes it cheaper for foreign investors to purchase.

With Federal Reserve Chair Jerome Powell recently suggesting that the central bank is prepared to raise interest rates even higher, Treasury yields soared this week. The 10-year Treasury note yield spiked 0.84% on Friday to 3.22%, the highest level in seven years.

Gold is generally sensitive to a rising-rate environment because it lifts the opportunity cost and sends investors into yield-bearing assets. As the bond market posts impressive gains amid increasing rates, traders are taking advantage and pouring into Treasuries. Despite uncertainty in the global financial market, stemming from the international trade war, gold has not been attractive to traders as a safe-haven asset.

In other metals markets, December copper futures were flat at $2.77 per pound. December platinum futures added $5.30, or 0.64%, to $829.80 an ounce. December palladium futures edged up $7.10, or 0.68%, to $1,052.60 per ounce.

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