Gold hits highest level since May after US employment data falls

(Bloomberg) — Gold rose to a six-week high after U.S. hiring data showed a gradual slowdown in the labor market, raising expectations for a lower interest rate in the coming months.

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Bullion prices rose 1.4% to $2,389.35 an ounce as of 1:30 pm in New York on Friday, based on data from the US Bureau of Labor Statistics that showed US hiring and wage growth slowed in June, while the unemployment rate edged up.

Ole Hansen, head of commodity strategy at Saxo Bank A/S, said the new data “maintains the prospect of a rate cut in September.” Swaps traders are now pricing in a 75% chance of a rate cut in two months.

“After last week's strong rally, further upside may be limited due to the absence of many traders in the US following Thursday's public holiday,” Hansen said.

Gold remained in a relatively narrow trading range for most of last month, but it jumped 2.7% this week on expectations of an interest rate cut in September.

Silver rose 3.3%, while platinum and palladium also gained. The Bloomberg Dollar Spot Index and the 10-year US Treasury yield were both headed for weekly declines.

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