Gold price trends higher as market grows cold on July rate hike
Gold rose for a third straight session after mixed US jobs data on Thursday, with the dollar tumbling on expectations of the Federal Reserve skipping an interest rate hike at its next policy meeting.
Spot gold gained another 0.8% to $1,977.96 an ounce by 11:20 a.m. EDT, while US gold futures was up 0.7% to $1,996.40 per ounce in New York.
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The latest National Employment report showed that US private payrolls increased by far more than expected in May, but separate data later revealed the number of new jobless claims only rose modestly last week.
“The initial reaction was the market selling off … and then you have another number 15 minutes later showing that jobless claims came out in line,” Daniel Pavilonis, senior market strategist at RJO Futures, told Reuters.
The US dollar drifted lower from a two-month high, making bullion cheaper for holders of other currencies, as investors trimmed bets that the Fed will raise interest rates this month.
Markets now see a 70% chance the Fed will keep rates unchanged the following month, up sharply from a 30% probability earlier, after Fed officials including the vice chair-designate pointed towards a rate hike “skip” in June.
“There’s some kind of safe-haven demand supporting gold because of uncertainty regarding the debt ceiling bill,” said Commerzbank analyst Carsten Fritsch.
(With files from Reuters)