Gold Price Climbs After U.S. Jobs Report
New York (May 8) Gold prices rose Friday after U.S. jobs data matched expectations for April, but steep revisions to March data sowed doubts about the labor market’s health and bolstered hopes that the Federal Reserve would delay raising interest rates.
The U.S. economy added a seasonally adjusted 223,000 jobs in April, the Labor Department said. March data were revised to 85,000 jobs, down from a previously reported 126,000. The unemployment rate, collected through a separate survey, fell to 5.4% in April from 5.5% in March. Economists expected a gain of 228,000 jobs in April and an unemployment rate of 5.4%.
Gold prices initially jumped to $1,193 a troy ounce in response to the report, but they pulled lower as traders sifted through the data for clues about future U.S. monetary policy.
“That back-month revision is horrible ... (and) will be supportive for gold,” said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago. “The March number was bad from the get-go, and then to be revised even lower, what’s going to happen to us next month?”
Signs of weakness in the U.S. labor market bolster the case for the Federal Reserve to delay raising interest rates, a move widely expected in the second half of 2015. Gold doesn’t earn interest or pay dividends and has an easier time competing with yield-bearing assets like Treasury bonds when rates are pinned at zero.
Gold for June delivery, the most actively traded contract, was recently up $5.60, or 0.5%, at $1,187.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
But gold’s gains were muted as the threat of higher interest rates remains in play, said Ira Epstein, a broker with the Linn Group in Chicago.
“We’re debating when interest rate increases will come; it does not take them off that table. And that means a strong dollar and weak gold,” Mr. Epstein said, adding that he still expects prices to head toward this year’s lows.