Gold rallies to a 14-month crest as weak US jobs data dents dollar

New York (June 8) - Gold prices jumped 1% on Friday to their highest levels since April 2018 as a sharp slowdown in U.S. jobs growth sent the dollar lower on growing expectations that the Federal Reserve would cut interest rates this year.

Gold also has benefited from concerns that U.S. trade wars with Mexico and China will slow the global economy. The precious

metal is up more than 2.5% so far this week. Spot gold was 0.4% higher at $1,339.97 per ounce at 2:34 p.m. EDT (1834 GMT), having earlier hit its intra-day high of $1,348.08.

U.S. gold futures settled up 0.3% at $1,346.10 an ounce.

The U.S. Labor Department reported on Friday that job growth slowed sharply in May and wages rose less than expected.             "The U.S. jobs number was weaker than expected and that

rallied the gold market. That gives the bulls more technical

momentum," said Jim Wyckoff, senior analyst at Kitco.

    Chances "have significantly increased that the U.S. Federal

Reserve is going to lower interest rates sooner rather than

later and that is also working in favor of the precious metals

bulls," Wyckoff said.

    Traders of U.S. short-term interest rate futures added to

bets that the Fed will start to cut rates as soon as July and

reduce them two more times before the end of the year.

    Lower interest rates boost gold by reducing the opportunity

cost of holding the metal and by weakening the dollar, which

skidded to its lowest in 2-1/2 months after the U.S. jobs data.

    The United States granted Chinese exporters two more weeks

to get their products into the U.S. before increasing tariffs on

those items, according to a U.S. government notice posted

online.            

    "On China side this going to be a protracted trade war ...

The resulting loss of economic momentum could push more investor

allocations into gold and that would be the primary factor

driving prices north of $1,350 (in the medium term)," said

Daniel Ghali, commodity strategist at TD Securities.

    President Donald Trump said on Friday there was a "good

chance" that the United States would be able to reach a deal

with Mexico over a surge of migrants on their border, although

his administration was still pushing ahead with a plan to slap

import tariffs on all Mexican goods next week.            

    Silver        gained 1.1% to $15.01 per ounce, on track for

its biggest weekly increase since late December.

    Platinum dipped 0.2% to $801.50 an ounce, but was

headed for its first weekly gain in seven weeks.

    Palladium was up 0.6% at $801.50 an ounce.

Reuters