Gold futures climbed Friday, recouping some of the sharp loss from a day earlier that sent prices to their lowest level of the year, but the precious metal still registered a loss for the week—their fifth in six weeks.
Data Friday revealed that the U.S. created a larger-than-expected 263,000 new jobs in April, which helped the unemployment rate fall to a 49-year low of 3.6%.
In reaction, however, the dollar edged lower, with the ICE U.S. Dollar Index DXY, -0.30% down 0.3%, contributing to a weekly decline so far of 0.5% as gold futures settled. Weakness in the buck provides support for dollar-denominated gold.
The dollar’s reaction to the jobs report was “a typical V-shape move: up first then down as investors realized the nonfarm payrolls report was not as solid as the headline jobs growth suggested,” said Fawad Razaqzada, technical analyst at Forex.com. “Similarly, yields initially rose then fell back as bonds rallied.”
This helped to underpin U.S. stocks and gold prices, “on perception that this mixed-bag jobs report hasn’t change the outlook for U.S. interest rates materially,” he said in an email update.
Gold for June delivery GCM9, +0.70% on Comex tacked on $9.30, or 0.7%, to settle at $1,281.30 an ounce, with the front-month contract paring its weekly loss to 0.6%, according to FactSet data. The yellow metal had posted a gain last week, but fell in each of the four weeks before that.
July silver SIN9, +2.38% rose 36.1 cents, or 2.5%, to $14.978 an ounce, with the contract down 0.7% on the week.
The latest Institute for Supply Management’s nonmanufacturing index released Friday showed a reading of 55.5 in April, the slowest reading since August 2017. The ISM service index reading was “not very good; so while employment is strong there are still small signals of economic headwinds,” said Jeff Wright, executive vice president of GoldMining Inc. “I believe this plays into the FOMC statement to look for creative ways to keep interest rates low without a rate cut on the horizon.”
Gold had seen its lowest close of 2019 on Thursday, losing ground for the session as the dollar gained in the wake of remarks Wednesday by Federal Reserve Chairman Jerome Powell, who appeared to disappoint investors looking for him to signal the Fed was leaning toward a...