Gold soars after downbeat US job report

Chicago, Oct 3 (IANS) Gold futures on the COMEX division of the New York Mercantile Exchange rallied strongly on Friday, snapping its five-session losing streak, as a disappointing US job report weighed on the dollar.

The most active gold contract for December delivery rose $22.9, or 2.06 percent, to settle at $1,136.6 per ounce, Xinhua news agency reported.

The US Labour Department reported on Friday the US economy added 142,000 jobs in September, well below the market estimate of 200,000. The government also sharply lowered employment gains for August.

The data saw investors scale back expectations for a rate hike by the US Federal Reserve, which undercut the dollar, lifting the appeal of the precious metal.

Analysts pointed that investors should forget about a 2015 rate hike as the US labour market is shrinking with the labour participation falling to a 38-year low.

The US central bank has been keenly watching employment and inflation as two key gauges to help influence its plans for kicking off the first interest-rate hike in nearly a decade.

Generally, increasing interest rates would boost the US dollar higher. Analysts note gold and the US dollar typically move in opposite directions, which means a weaker US dollar can be a positive for commodities priced in dollars, while a stronger dollar can weigh on commodities.

Meanwhile, the weak US data sparked worries that a global economic slowdown is dragging on the nation’s growth, which pushed investors to safe-haven metals. Other date on Friday showed US factory orders fell in August.

Among other metals, silver for December delivery Friday added 75.2 cents, or 5.18 percent, to close at $15.263 per ounce, while platinum for January delivery gained $4.3, or 0.48 percent, to close at $909.5 per ounce.

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