Gold Gains, Scoring A Third Consecutive Weekly Advance

Gold ticked higher Friday following the tepid U.S. nonfarm payrolls report, which caused some U.S. dollar weakness, further supporting gold prices. After Friday’s gain of $5.80 an ounce February gold finished the week with a 0.5% gain.

That was a third consecutive weekly gain for the precious metal, which experienced extreme volatility for the week, trading in a total range of 4.4% due to the potential for a U.S.-Iran war at the start of the week, and then relaxed tensions by the end of the week.

The December nonfarm payrolls showed 145,000 new jobs being added to the U.S. economy, which was less than the 164,000 new jobs expected, and far less than the 266,000 new jobs added in November.

The unemployment rate remained at a 50-year low of 3.5%, but wage inflation fell to a 2.9% annual pace. That was the first time since July 2018 wage inflation has dropped below 3% and it should give the Federal Reserve something to consider when they meet later this month.

Gold had been trading in negative territory ahead of the employment data, as an uptick in risk appetite has been a headwind for gold over the past few sessions. However the weaker than expected reading quickly lifted the yellow metal back above the unchanged line.

Although gold has dropped off its seven year high reached earlier in the week, the rapid way in which the conflict between the U.S. and Iran unfolded will remind traders that heightened geopolitical risks can’t be ruled out, and that should continue to provide some support for gold.