The gold price posted a solid gain on Monday after a disappointing US jobs report dented the dollar and could prompt the Federal Reserve to consider delaying an interest rate hike.
Gold for June delivery on the Comex division of the New York Mercantile Exchange was last up $16.50, or 1.4 percent, at $1,217.40 per ounce. Trade has ranged from $1,212.60 to $1,223.50.
“We’re expecting some solid buying across the board today after the poor non-farm payrolls print,” MKS Finance noted.
Total nonfarm payroll employment increased by just 126,000 in March, which was well below the 247,000 forecast, while the unemployment rate was unchanged at 5.5 percent, the US Bureau of Labor Statistics reported on Friday.
Average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $24.86. Over the year, average hourly earnings have risen by 2.1 percent.
The change in total nonfarm payroll employment for January was revised downward from 239,000 to 201,000, and the change for February was revised from 295,000 to 264,000.
“In all, this was a truly weak report, having caught us and nearly everyone else on The Street wholly off guard,” said Dennis Gartman, editor of the Gartman Letter, who noted that dollar and equity futures moved sharply lower in the wake of the report.
The dollar was last 0.17 percent softer at 1.0992 against the euro, while US equities are set to open lower. Several stock markets in Asia and Europe are closed again today.
“[The dollar] remains weak this morning and it shall remain so for a while as the market comes to grips with the fact that any thoughts of Fed tightening have been pushed back sharply on this report. Any chance of a June tightening has been wholly eliminated and the odds of a September tightening have been diminished almost as materially,” Gartman added.
Every labour report over the next several months will take on added importance because the because the Federal Reserve is on the verge of raising interest rates. The current market consensus is that rates will rise in the second half of the year although this is a moving target that will be dictated by jobs and inflation data.
As for the other precious metals, Comex silver for May delivery were last up 39.9 cents, or 2.36 percent, at $17.100 per ounce. Trade has ranged from $16.960 to $17.235.
Platinum futures for July delivery on the Nymex were last up $19.80 to $1,174.30 per ounce, while the most-actively traded palladium contract was $762.15 per ounce, up $15.85.
The post Gold rallies following soft US jobs report appeared first on The Bullion Desk.
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