Gold rises after U.S. payrolls report, but heads for first weekly fall in five

Gold prices rose on Friday as investors sought safe-haven bullion on heightened uncertainty over a widening Middle East conflict.

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Gold rose on Friday after softer U.S. payrolls data kept hopes of a Federal ‌Reserve rate cut alive, but remained on track for its first weekly decline in five weeks as a stronger dollar kept gains in check.

Spot gold was up 1.4% at $5,149.14 per ounce, ​but was down 2.4% this week. U.S. gold futures for April delivery settled 1.6% higher at $5,158.70.

“An alarmingly ​weak payrolls report that saw heavy private sector job losses along with higher ⁠wages whispers stagflation; let’s see if this is enough to help gold recover from what ​has been a disappointing week,” said Tai Wong, an independent metals trader.

Data showed that nonfarm payrolls decreased ​by 92,000 jobs last month, compared with economists’ expectations for a 59,000 gain, while the unemployment rate rose to 4.4%.

On the geopolitical front, Israel pounded Beirut after ordering an unprecedented evacuation of the entire southern suburbs of ​the Lebanese capital, a major expansion of the war against Iran it began a week ago ​alongside the United States.

The U.S. dollar index, opens new tab was set for its strongest weekly rise in over a year ‌as the ⁠escalating conflict in the Middle East drove demand for safe-haven assets. That has made dollar-priced gold costlier for overseas buyers, helping push the metal down despite its reputation as a haven from risk.

“You have algorithmic sellers calibrated to automatically sell when the dollar strengthens, part of the underperformance in precious ​metals this week,” said ​Hugo Pascal, a ⁠precious metals trader at InProved.

Fed policymakers will meet on March 18, where they are widely expected to hold rates steady, with the first cut ​widely expected in July, as per the CME FedWatch tool.

Gold is often ​viewed as ⁠a long-term inflation hedge, but typically performs well in low interest-rate environments because it yields no income. It is up more than 18% so far this year. As the Iran conflict raged, crude prices were ⁠headed ​for their sharpest weekly gain since Russia’s invasion of Ukraine ​in February 2022, stoking renewed inflation fears.

Spot silver rose 2.6% to $84.30 per ounce. Spot platinum was up 0.5% at $2,131.50, while palladium lost 1.1% ​to $1,646.84. All metals were headed for weekly losses.

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