Gold hits highest since May after cooling US jobs data

(Bloomberg) — Gold rose to a six-week high after U.S. employment data pointed to a gradual cooling in the labor market, bolstering expectations for lower interest rates in the months ahead.

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The price of precious metals rose 1.4% to $2,389.35 an ounce as of 1:30 p.m. in New York on Friday, based on data from the U.S. Bureau of Labor Statistics that showed U.S. employment and wage growth slowed in June, while the unemployment rate rose slightly.

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

“After prices rose sharply last week, further gains may be limited due to the absence of many traders” in the U.S. following Thursday’s national holiday, Hansen said.

Gold has been trading in a relatively narrow range over the past month but has risen 2.7% this week on expectations of a rate cut in September.

Silver rose 3.3%, while platinum and palladium also rose. The Bloomberg Dollar Spot Index and 10-year U.S. Treasury yields were both headed for weekly declines.

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