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New York - Gold futures extended gains after the US economy added fewer jobs last month than forecast, supporting the case for the Federal Reserve to move slowly in raising interest rates.
The 156 000 increase followed a 167 000 rise in August that was more than previously estimated, a Labour Department report showed on Friday.
The median forecast in a Bloomberg survey of economists called for a 172 000 advance. The jobless rate rose to 5% as the labour participation rate ticked up.
Bullion is headed for a second straight weekly decline after improving US economic data boosted the dollar and fuelled bets that the Fed will tighten monetary policy this year. Higher rates curb the appeal of gold, which doesn’t pay interest.
Even with a rate hike in December, the jobs report fortifies the view that policy makers are unlikely to be aggressive in further increases, said Chris Gaffney, president of world markets at St. Louis-based EverBank.
“Lower longer is the overall theme,” Gaffney said in a telephone interview. “I think the data continues to show that the economy is not going to be strong enough to make a dramatic move higher for interest rates.”
Gold futures for December delivery rose 1% to $1 265 an ounce at 8:59 on the Comex in New York.
The metal is down about 4% this week, on course for its biggest drop since November.
