Gold Gains After Weaker US Jobs Numbers

GOLD - NEW YORK. Gold extended gains on Friday after weaker U.S. nonfarm payrolls numbers cast doubts over the trajectory of interest rate hikes beyond July yet again.

Spot gold was up 0.4% to $1,918.62 per ounce at 9:13 a.m. EDT (1313 GMT). U.S. gold futures rose 0.5% to $1,924.30.

Labour department data showed nonfarm payrolls came in well below expectations last month, but the unemployment rate retreated from a seven-month high amid fairly strong wage gains.

Giving bullion a fillip, U.S. Treasury yields moved lower and the dollar slipped after the data.

Traders stuck to bets the Fed will raise interest rates this month, but were becoming more skeptical of the chance for further hikes beyond that.

"Gold remains stubbornly bid - trading higher even before the number. Today's report has given bulls some relief, at least short term," said Tai Wong, a New York-based independent metals trader.

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"Gold should hold above $1,910 but the real test is $1,950-60 level where the 100 and 200 day moving averages are converging. The report wasn't soft enough to warrant that kind of rally today."

Gold is sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion.

But this comes a day after another set of data showed people filing new claims for unemployment benefits increased only moderately last week, while private payrolls surged in June, showing a strong labour market remained.

While this week's ADP jobs report, hawkish Fed speak and FOMC minutes had moved the needle well into the reading of a rate hike this month, the nonfarm payrolls number "dials that needle back a bit, toward those market watchers wanting the Fed to stand pat in July," Jim Wyckoff, senior analyst at Kitco, said in a note.

Silver was mostly unchanged $22.75 per ounce, platinum up 0.2% to $903.16 and palladium was off 0.4% to $1,237.05.