Gold prices rose to their highest level in over a month on Friday after a disappointing U.S. employment report underlined the case for the Federal Reserve to continue raising rates at a gradual pace. Gold for June delivery settled at $1,278.77 on the Comex division of the New York Mercantile Exchange, up 0.93%. It was the highest close since April 25.
The U.S. economy added 138,000 jobs last month the Labor Department reported, falling far short of economists' expectations of 185,000 new jobs. Figures for March and April were also revised to show that 66,000 fewer jobs were created than expected, indicating that the labor market may be losing momentum. The unemployment rate ticked down to a 16-year low of 4.3%.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell 0.57% to 96.61 late Friday. It was the lowest close since the U.S. presidential election on November 8, which sent the index soaring.
Gold and the dollar typically move in opposite directions, which means if the dollar goes down, gold futures, which are denominated in the U.S. currency, will rise.
Most analysts still believe the disappointing data will not stop the Federal Reserve from raising interest rates at its meeting later this month. Traders now see a roughly 88% chance of a Fed rate increase on June 14, down slightly from 89% before the jobs report.
But the slowdown in jobs growth could temper expectations for a pick-up in economic growth in the second quarter after the economy expanded by just 1.2% year over year in the first quarter.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Elsewhere in precious metals trading, silver jumped 1.56% to $17.55 a troy ounce late Friday.
Copper was trading at $2.57 a pound late Friday, down 0.44%.
Palladium was up 1.86% percent at $838.42, while platinum advanced 2.84% to $955.35 an ounce in late trade.
Events in Europe are likely to set the tone for global financial markets this week, ahead of the European Central Bank policy meeting and the British general election. Chinese data on trade and inflation will also be closely watched.
In the U.S., market players will pay close attention to former FBI director James Comey's testimony to the Senate Intelligence Committee in a hearing that could add to difficulties facing the Trump administration.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 5
China is to publish its Caixin services PMI.
The UK is to release data on manufacturing activity.
The U.S. is to release data on factory orders, and the Institute for Supply Management is to publish its manufacturing index.
Tuesday, June 6
The Reserve Bank of Australia is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
Wednesday, June 7
Australia is to publish data on first-quarter economic growth.
The UK is to publish industry data on house price inflation.
Canada is to report on building permits.
Thursday, June 8
China and Australia are both to release data on trade.
Switzerland is to publish inflation figures.
In the UK, voting in the general election is to get underway.
The ECB is to announce its latest monetary policy decision, and President Mario Draghi is to hold a post-policy meeting press conference.
The U.S. is to report on initial jobless claims.
Friday, June 9
China is to release inflation data.
The UK is to report on manufacturing production and trade.
Canada is to round up the week with its monthly employment report.