Mumbai, 7 Sep (Commoditiescontrol): Gold prices dipped on Friday after approaching record highs earlier in the session. The drop came as mixed U.S. jobs data raised uncertainty about the Federal Reserve's potential interest-rate cuts this month.
Spot gold fell by 0.3% to $2,509.35 per ounce, after reaching its highest level since August 20, when it last touched a record peak. U.S. gold futures also slipped, down 0.2% to $2,538.90 per ounce.
The labor market data presented a complex picture. The U.S. Labor Department reported that non-farm payrolls increased by 142,000 in August, falling short of economists' expectations of 160,000, based on a Reuters poll. Additionally, July's payroll figures were revised downward to 89,000. However, the unemployment rate fell to 4.2%, matching forecasts and down from 4.3% the previous month. Average hourly earnings also saw a slight uptick, complicating the outlook for the size of the Fed's September rate cut.
Following the release of the data, market expectations for a 25-basis-point rate cut by the Fed dropped to 59%, down from around 70% a week earlier. Meanwhile, the likelihood of a larger 50-basis-point cut increased to 41% from 30%, according to the CME FedWatch tool.
John Williams, President of the Federal Reserve Bank of New York, commented that the August employment figures were in line with his expectations for the economy. He suggested that any forthcoming rate cuts would aim to maintain balance in the job market.
Lower interest rates typically benefit gold, as they reduce the opportunity cost of holding non-yielding assets like bullion.
In other precious metals, spot silver declined by 0.6% to $28.65 per ounce, platinum rose 0.5% to $929.00 per ounce, and palladium slipped by 0.2% to $938.75 per ounce.
(By Commoditiescontrol Bureau: 09820130172)
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