Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold rose 0.7% to close near $1,327 after surprisingly weak jobs data dimmed prospects for a September rate hike, spurring demand for alternative assets. The metal finished the week 0.1% higher.

Hiring slowed dramatically in August, according to today's nonfarm payrolls report from the Labor Department, with merely 151,000 new jobs added. The total was nearly 30,000 fewer than forecast and well-under the 273,000 monthly average for June and July. Along with jobs in construction, factory jobs were especially hard-hit, which came as little surprise after yesterday's ISM report showed manufacturing in contraction for the first time in six months. Unemployment held at 4.9% and wages were little-changed.

Gold had fallen to a two-month low earlier this week in response to relatively hawkish comments from prominent Fed officials including Vice Chair Stanley Fischer, who said two small rate hikes were possible by year's end, depending on data. That calculus appears to have shifted.

Compounded by yesterday's weak ISM data, today's anemic payrolls report raises new questions about the economy's ability to weather one hike this year, let alone two. CME FedWatch sees a 21% chance for September, down from 24% yesterday. Odds for December crept a little higher to 55%.

The other precious metals also rose on the day but were mixed for the week. Silver added 2.2% for a weekly gain of 3%. Platinum picked up 1.3% but lost 1.4% this week. Palladium gained 1.8% but still saw a weekly loss of 2.8%.

At the Comex close: December gold gained $9.60 to $1,326.70; December silver added 42 cents, to $19.37; October platinum picked up $13.30 to $1,062.20; and December palladium rose $11.85 to $673.55 an ounce.