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Gold climbs as slower U.S. jobs growth clouds Fed taper timeline

Gold advanced more than 1% to its highest in 2-1/2 months on Friday, as a slower-than-expected U.S. jobs growth in August drove the dollar lower, casting doubts on the Federal Reserve’s tapering timeline.

Spot gold was up 1.2% at $1,830.71 per ounce by 1:33 p.m. ET,, after hitting its highest since mid-June at $1,833.80, on track to a fourth straight weekly gain.

U.S. gold futures settled 1.2% higher at $1,833.7.

· The dollar index slipped soon after the report, bolstering gold’s appeal for those holding other currencies.

· “Gold received a welcome boost from a much weaker (jobs) report,” said Saxo Bank analyst Ole Hansen.

“But the fact that gold has failed to break above resistance at $1,835 could indicate some skepticism about whether this means peak growth and delayed taper.”

· Fed Chair Jerome Powell said last week that if job growth continued, the Fed could start cutting asset purchases this year, but would remain cautious about raising interest rates.

· “The knee jerk reaction was positive for gold as a big miss with the headline number pretty much ruled out a September taper,” said Ed Moya, senior market analyst at foreign exchange brokerage OANDA, putting it on course for a break toward $1,850.

· Some investors view gold as a hedge against higher inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion.

· “Market focus will shift to the September FOMC meeting next. We continue to see further upside risk for gold in light of our expectations for the USD to weaken and real yields to remain deeply negative,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.

· Silver jumped 3.4% to $24.70 per ounce, while platinum was 2.6% higher at $1,024.41. Palladium rose 1.1% to $2,425.70.

· Jobs report disappoints — only 235,000 positions added vs. expectations of 720,000

The unemployment rate dropped to 5.2% from 5.4%, in line with estimates.

Wages continued to accelerate, rising 4.3% on a year-over-year basis and 0.6% on a monthly basis. Estimates had been for 4% and 0.3% respectively.

· Treasury yields turn higher after poor August jobs report

The yield on the benchmark 10-year Treasury note gained about 3 basis points, trading near 1.322%.

· Fed likely to announce taper in November, former Fed official says

The U.S. Federal Reserve is likely to announce the tapering of its asset purchases in November and begin the process a month later, former Federal Reserve official Dennis Lockhart said on Thursday.

· Black unemployment setback shows Fed's challenges targeting 'broad and inclusive' job growth

· European Central Bank to announce tapering in December, analysts say

The European Central Bank will announce the reduction of its Covid-related stimulus in December, four analysts told CNBC amid an economic improvement in the euro zone.

· Biden administration unveils $65 billion plan to combat next pandemics after Covid

The Biden administration laid out Friday a $65 billion plan U.S. officials say will help the nation combat the next biological threats after the Covid-19 pandemic subsides.

· Wall St Week Ahead Investors grow wary as stocks hit new highs

Investors are girding their portfolios for potential stock market volatility, even as equities hover near fresh highs after logging seven straight months of gains.

· Ether above $4,000 for first time since May 15

· Bitcoin rises back above $50,000

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