Gold jumps after weak U.S. payrolls report dents rate-hike bets

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Gold futures gained Thursday after a weaker-than-expected June employment report pressured the U.S. dollar and cooled near-term expectations for rate-tightening from the Federal Reserve.

Only 57K non-farm jobs were added in June, the Bureau of Labor Statistics reported, well below analyst forecasts of 115K jobs added, which lifted equities and commodities while calming worries over future interest rate hikes.

"The lower-than-expected ​jobs number portends to less likelihood of potential rate hikes later ⁠this year. As we know, gold has a tendency to perform better in ​lower interest rate environments," High Ridge Futures director of metals trading David Meger said in a note.

Traders ‌now see ⁠a slightly better than 50% chance of a rate hike by September, down from 66% before the release of the jobs report, according to the CME FedWatch tool.

Fed Chairman Kevin Warsh said Wednesday that inflation expectations and inflation risks have eased in recent weeks, even as ​he repeated that the ​central bank is committed ⁠to bringing inflation down to its 2% goal.

Gold may have found a bottom, and the market has overestimated Fed hawkishness, Trade Nation senior analyst David Morrison said, adding he "wouldn't be surprised to see rate hikes start to get priced out by Sep/Oct. If so, that would also support precious metals."

Front-month Comex gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) for July delivery jumped 1.1% on Thursday to $4,112.70/oz, its highest settlement value since June 23, and front-month Comex July silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) gained 0.9% to $60.643/oz.

For the week, front-month gold and silver gained 0.8% and 2.4%, respectively.

ETFs: (GLD [https://seekingalpha.com/symbol/GLD]), (GDX [https://seekingalpha.com/symbol/GDX]), (GDXJ [https://seekingalpha.com/symbol/GDXJ]), (IAU [https://seekingalpha.com/symbol/IAU]), (NUGT [https://seekingalpha.com/symbol/NUGT]), (PHYS [https://seekingalpha.com/symbol/PHYS]), (GLDM [https://seekingalpha.com/symbol/GLDM]), (AAAU [https://seekingalpha.com/symbol/AAAU]), (SGOL [https://seekingalpha.com/symbol/SGOL]), (DUST [https://seekingalpha.com/symbol/DUST]), (RING [https://seekingalpha.com/symbol/RING]), (BAR [https://seekingalpha.com/symbol/BAR]), (OUNZ [https://seekingalpha.com/symbol/OUNZ]), (SGDM [https://seekingalpha.com/symbol/SGDM]), (SGDJ [https://seekingalpha.com/symbol/SGDJ]), (SLV [https://seekingalpha.com/symbol/SLV]), (PSLV [https://seekingalpha.com/symbol/PSLV]), (SIVR [https://seekingalpha.com/symbol/SIVR]), (SIL [https://seekingalpha.com/symbol/SIL]), (SILJ [https://seekingalpha.com/symbol/SILJ])

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