Gold prices rise following strong nonfarm payrolls release

Gold prices rose Friday, and were headed for weekly gains as heightened uncertainty over US interest rates and trade tariffs fueled increased safe haven demand.

At 09:55 ET (14:55 GMT), spot gold rose 0.7% to $2,689.01 an ounce, while gold futures expiring in February rose 1.3% to $2,724.81 an ounce. 

Spot prices were trading up about 1.8% this week, while the gold contract was on tract for a weekly gain of 2.7% Gold heads for weekly gains on haven demand

The yellow metal has been boosted this week, as increased economic uncertainty spurred some safe haven demand.

Data released earlier Friday indicated that the US economy added 256,000 jobs in December, more than the 155,000 jobs expected,

The release of strong US payrolls data has prompted traders to adjust their expectations for the next Federal Reserve rate cut, according to the data compiled by Bloomberg. The next rate cut is now projected to occur just once in 2025 and as late as October.

These numbers support the notion that the US economy is progressively less reliant on monetary policy support.

The minutes of the central bank’s December meeting showed this week that policymakers were cautious over cutting interest rates further, amid sticky inflation and signs of resilience in the labor market. 

Fed officials were also seen expressing some concerns over inflationary pressures from protectionist and expansionary policies under President-elect Donald Trump. Uncertainty over his plans is expected to build ahead of his inauguration on January 20. 

Other precious metals rose on Friday. Platinum futures rose 1.2% to $996.45 an ounce, while silver futures rose 2% to $31.620 an ounce.  Copper upbeat on China stimulus hopes 

Among industrial metals, copper prices extended gains as weak economic readings from top importer China continued to spur bets that Beijing will substantially increase its stimulus efforts in 2025.

Benchmark copper futures on the London Metal Exchange rose 0.1% to $9,089.0 a ton, while March copper futures rose 0.7% to $4.3400 a pound. 

Weak Chinese inflation data released on Thursday sparked bets that Beijing will be pushed into unlocking more stimulus, especially fiscal measures aimed at shoring up private spending.

The threat of increased US trade tariffs is also expected to push Beijing into doling out more stimulus to protect the Chinese economy, which is already grappling with years of languid growth.

China is the world’s biggest copper importer, and has been a major weight on copper prices amid concerns that demand in the country will slow due to economic strife.

(Ambar Warrick contributed to this article.)

 

 

 

But strength in the dollar, ahead of a key labor market report due later in the day, limited any major upside in gold, as did hawkish signals from the Federal Reserve. 

 

Source: Investing.com