Gold jumped more than 1% en route to its best week since November last year after an unexpected drop in US jobs growth in April hastened a retreat in the dollar and Treasury yields.
Spot gold rose 0.9% to $1,832.07 per ounce by 12:09 p.m. EDT (1609 GMT), after hitting its highest since Feb. 11, at $1,842.91. Gold is up 3.6% so far this week, its best since November 2020.
US gold futures rose 1% to $1,833.10.
With the “complete miss on the (jobs) number”, yields are going to compress and the dollar also fell, allowing gold to shoot up, said Phillip Streible, chief market strategist, Blue Line Futures in Chicago.
But gold’s rally may be short lived since next month’s jobs data could show a “blow out” number, Streible added.
April’s nonfarm payrolls rose by only 266,000 jobs, with employers likely frustrated by labor shortages as the economy reopens.
“This report at least temporarily throws some cold water on notions the Federal Reserve may be forced to raise interest rates much sooner than many expected,” Kitco Metals senior analyst Jim Wyckoff said in a note.
The dollar extended declines, while US Treasury yields also retreated, lowering the opportunity cost of holding non-interest bearing bullion.
Gold could push towards $1,857, followed by the $1,925 resistance level, Edward Moya, senior market analyst at OANDA said in a note.
On the physical front, demand fell in second biggest consumer India, amid a worsening pandemic.
“Lockdown in India does not help physical demand,” StoneX analyst Rhona O’Connell said.
“But all these fundamental physical flows, while they contribute to inflexion points and corrections, are ultimately dwarfed by professional money movements.”
Palladium fell 1% to $2,918.82, after hitting an all-time high of $3,017.18 earlier this week.
Silver rose 0.2 % to $27.35 per ounce, set for a 5.5% weekly gain. Platinum dipped 0.5%, to $1,246.99.