Gold gains as weak US jobs data, dollar drop boost safe-haven appeal

Gold prices climbed on Friday after the dollar weakened in response to soft US private-sector employment data, raising hopes of another interest rate cut by the Federal Reserve. The prolonged government shutdown in Washington also pushed investors towards the safety of bullion.

Spot gold rose 0.4 percent to $3,994.03 per ounce in early Asian trading, although it remained on track for a small weekly loss of 0.3 percent. US gold futures for December delivery were up 0.3 percent at $4,004.40 per ounce.

Weak jobs data lift expectations of rate cut

Fresh data revealed that the US economy lost jobs in October, particularly in the government and retail sectors. Businesses also reported a wave of layoffs linked to automation and cost-cutting. Analysts believe the figures strengthen the likelihood of another rate cut in December.

“The private jobs data is still indicating that a rate cut in December is likely, and that’s why gold prices are getting some kind of support,” said ANZ commodity strategist Soni Kumari.

The dollar index fell sharply as traders reacted to the weak employment data. A softer dollar typically boosts gold, making it cheaper for buyers holding other currencies. Markets now see nearly a 70 percent chance of another rate reduction next month, up from about 60 percent a day earlier.

Shutdown deepens uncertainty

The ongoing US government shutdown, now the longest in history, has added to investor anxiety. With key official data releases delayed, markets have turned to private-sector indicators to gauge economic health.

Non-yielding gold tends to shine in times of economic uncertainty and low interest rates, and traders are now watching how long the shutdown might continue.

Gold prices rise in Pakistan

In Pakistan, gold prices followed the global trend and posted strong gains on Thursday. According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola increased by Rs3,700 to reach Rs423,062, while 10 grams of gold rose by Rs3,112 to Rs362,707.

The association reported that international gold was trading at $4,007 per ounce, with a $20 premium, after gaining $37 during the day. Silver also saw an uptick of Rs90 per tola, reaching Rs5,112.

Despite the recent rise, bullion remains almost 8 percent below its record high of $4,381.21 per ounce set on October 20.