Gold steadied after its biggest weekly gain since January, with traders assessing a surprise contraction in the US jobs market that allayed concerns around an interest-rate hike.
Bullion was near $4,345 an ounce in early trading, having added more than 7% last week. Data published Friday showed US employers cut jobs in July while hiring in the prior two months was revised lower, suggesting the labor market is weaker than previously thought.
A Bloomberg gauge of the dollar dropped 0.4% after the data, giving a boost to commodities such as gold that are priced in the currency. The jobs report led to reduced bets on near-term hike in rates, with Federal Reserve policymakers increasingly divided on how to rein in inflation fueled by the months-long war in the Middle East. Higher borrowing costs are typically a headwind for bullion, which bears no interest.
Gold has held largely above the key $4,000-an-ounce support threshold in recent weeks, with dip-buyers emerging in growing force since a war-driven slump that led the metal into a bear market in June. Hedge funds and money managers boosted bullish bets on bullion to the highest in more than six months in the week ending Aug. 4, according to the latest CFTC data.
Adding strength to the metal, gold-backed exchange-traded funds in China increased inflows last week, extending the longest such streak since March. The country’s central bank also ramped up additions to its bullion reserves, with July’s addition of 640,000 ounces marking the 21st straight month of accumulation, data released on Friday showed.
Despite recent gains, gold remains nearly a fifth below levels before the Iran war began in late February. Over the weekend, Iran and Oman remained short of a final deal to reopen the Strait of Hormuz, while Tehran-backed Houthi militants in Yemen claimed an attack on a Saudi refinery near the Red Sea.
Spot gold edged up 0.1% to $4,347.01 an ounce at 7:29 a.m. in Singapore. Silver advanced 0.6% to $63.92 an ounce. Platinum and palladium were little changed. The Bloomberg Dollar Spot Index recovered 0.1% after Friday’s decline.
