Gold futures settled higher Friday, erasing a loss for the week, after data showing slower U.S. jobs growth in August appeared to lower the potential for an interest-rate increase at the Federal Reserve meeting later this month.
The employment data initially pressured the dollar, prompting gold, which is largely traded in the U.S. currency, to tap highs above $1,333. The yellow metal pared some of its gains, however, as the dollar strengthened again on shifting expectations for the timing of a rate hike.
December gold GCZ6, +0.89% rose $9.60, or 0.7%, to $1,326.70 an ounce. It eked out a gain of less than 0.1% for the week, according to FactSet data. Gold rebounded Thursday but it settled at a two-month low on Wednesday.
December silver SIZ6, +3.05% added 42.3 cents, or 2.2%, to $19.366 an ounce. Silver logged a roughly 3.3% gain for the week after suffering a decline of more than 8% in August, based on the most-active contract.
The debate over the speed and aggressiveness of Fed interest-rate changes has been pinned to each economic release but the payrolls report carried additional weight for financial markets. Prospects for higher interest rates can boost the dollar and dull the appeal of greenback-priced gold. They can also turn off investors from nonyielding precious metals.
On Friday, the ICE U.S. Dollar Index DXY, +0.24% a measure of the greenback against a basket of six rival currencies, was up nearly 0.3% as gold prices settled. It had traded lower initially after the jobs data.
The pace of hiring in the U.S. slowed sharply in August, with the economy adding 151,000 jobs—below the 170,000 forecast of economists polled by MarketWatch.
“With the employment report coming in at 151,000, the Fed should look at the number as a non-event,” said Mark Watkins, regional investment manager at U.S. Bank’s Private Client Group in Park City, Utah.
“If there was a chance for a rate increase at the September FOMC meeting, the employment number would have needed to be north of 250,000,” he said. “The economy is strong enough to sustain a September rate increase, but due to the sloth-like momentum in the recovery the Fed might look to maintain their wait-and-see policy.”
Other metals ended higher Friday. December copper HGZ6, +0.10% settled at $2.078 a pound, up less than half a cent, but down about 0.3% for the week. October platinumPLV6, +1.69% rose $13.30, or 1.3%, to $1,062.20 an ounce, ending roughly 1.4% lower on the week, while December palladium PAZ6, +2.73% climbed $11.85, or 1.8%, to $673.55 an ounce, cutting its weekly loss to 2.9%.
Among exchange-traded funds, the SPDR Gold Trust GLD, +1.02% was up nearly 0.8% as gold prices settled, trading around 0.2% higher for the week. The iShares Silver TrustSLV, +2.79% rose 2.1%, lifting its week to date gain to 3.4%. The VanEck Vectors Gold Miners GDX, +3.52% added 3%, but was up less than 0.1% on the week.