Gold prices soared to a fresh record high on Friday following data indicating a rise in the U.S. unemployment rate, fueling expectations that the Federal Reserve could soon initiate interest rate cuts.
Spot gold climbed 0.7% to $2,173.49 per ounce by 10:42 a.m. ET (1542 GMT), while U.S. gold futures also increased by 0.7% to $2,180.50.
Bullion was poised to register its most significant weekly percentage increase since mid-October.
Gold hit an all-time peak of $2,185.19 subsequent to a report revealing an uptick in the U.S. unemployment rate and a moderation in wage gains despite accelerated job growth in February.
David Meger, director of metals trading at High Ridge Futures, commented, “We still believe the same underlying premise remains, which is the combination of the expectation that the Fed is still going to cut rates later this year and dollar weakness.”
The dollar index (.DXY) was 0.3% lower, rendering gold more affordable for overseas buyers, while the yield on the 10-year U.S. Treasury declined to a more than one-month low.
Following the jobs report, traders escalated their expectations of Fed interest rate cuts in May to around 30%, although June remained the most likely scenario at 80%.
Gold initiated its record-setting streak on Tuesday, surpassing its December peak, primarily propelled by mounting indications of cooling price pressures and its traditional safe-haven allure.
Low interest rates buoy gold prices by reducing the opportunity cost of holding bullion.
Tai Wong, a New York-based independent metals trader, remarked, “This (jobs) report will be seen as one that keeps the Fed on course for June. Gold prices will continue to trend higher overall, though a short consolidation may be necessary.”
Spot silver dipped 0.3% to $24.25, while platinum decreased by 0.5% to $913.95 per ounce, and palladium retreated by 0.6% to $1,027.25. All metals were positioned for weekly gains.
