Investing.com - Gold prices rallied nearly 2% on Friday, after data showed the U.S. economy added the fewest number of jobs in seven months in April, raising doubts on whether the Federal Reserve will raise interest rates before the end of the year.
The Labor Department reported that the U.S. economy added 160,000 jobs last month, the smallest increase since September and well below the 202,000 jobs forecast by economists. The unemployment rate remained steady at 5%.
The one bright sport of the report showed that average hourly earnings rose by eight cents or 0.3%, bringing the year-on-year increase to 2.5% from 2.3% in March.
The report saw investors all but abandon expectations for a June rate hike, with most investors now seeing the next U.S. rate hike coming in September.
Gains were limited as remarks by a senior Federal Reserve official indicated that U.S. interest rates could still rise sooner than expected. New York Fed President William Dudley said that it was reasonable to expect two rate hikes this year despite weaker-than-expected April data on hiring.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rebounded in mid-afternoon trading following Dudley’s comments, ticking up 0.11% to 93.83 late Friday, after it fell as much as 0.6% earlier.
Gold for June delivery on the Comex division of the New York Mercantile Exchange jumped to an intraday high of $1,297.70 a troy ounce before paring gains to end at $1,294.00, up $21.70, or 1.71%, on the day.
For the week, gold prices tacked on $3.50, or 0.29%, the second straight weekly gain, amid indications the Fed will take a slow and cautious approach to raising interest rates this year.
A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Prices of the yellow metal are up nearly 22% so far this year as expectations faded that the Fed would move to normalize interest rates due to fears over the global economy.
Gold is sensitive to moves in U.S. rates, as a rise would lift the opportunity cost of holding non-yielding assets such as bullion.
In the week ahead, investors will continue to focus on U.S. economic reports to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016, with Friday’s retail sales data in the spotlight.
In addition, there are more than a half-dozen Fed speakers on tap as traders search for more clues on the timing of the next U.S. rate hike.
Elsewhere in metals trading, silver futures for July delivery climbed 20.0 cents, or 1.15%, on Friday to settle at $17.78 a troy ounce. On the week, silver futures dipped 39.3 cents, or 1.64%.
Also on the Comex, copper for July delivery shed 0.2 cents, or 0.09%, on Friday to end at $2.154 a pound, recovering slightly after falling to a session low of $2.135, a level not seen since April 12.
For the week, New York-traded copper prices plunged 11.7 cents, or 5.62% its largest weekly loss since early 2015, on worries over China's economy.
Monthly trade data released on Sunday, which showed that both exports and imports fell more than expected in April, added to concerns over the health of the world’s second largest economy.
Exports slumped 1.8% from a year earlier, worse than forecasts for a decline of 0.1%, while imports dropped 10.9%, compared to expectations for a fall of 5.0%. That left China with a surplus of $45.6 billion last month, the General Administration of Customs said.
The Asian nation will also publish data on April consumer and producer price inflation on Tuesday, followed by reports on industrial production, fixed asset investment and retail sales late on Friday.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 9
The Bank of Japan is to publish the minutes of its April policy meeting, giving investors insight into how officials view the economy and their policy options.
Germany is to release data on factory orders.
Chicago Fed President Charles Evans, Minneapolis Fed President Neel Kashkari and San Francisco Fed President John Williams are all due to speak throughout the day.
Tuesday, May 10
China is to release data on consumer and producer price inflation.
New York Fed President William Dudley, the official viewed as most closely aligned with Fed Chair Janet Yellen, is due to participate in a panel discussion about the international monetary system, in Zurich.
Wednesday, May 11
The Reserve Bank of New Zealand is to publish its financial stability report and Governor Graeme Wheeler is to hold a press conference.
Thursday, May 12
The Bank of England is to announce its latest interest rate decision and publish its monetary policy meeting minutes, including the voting breakdown. In addition, the bank is to release its quarterly inflation report and Governor Mark Carney, along with other policymakers, is to hold a press conference.
The U.S. is to release the weekly report on initial jobless claims, while Cleveland Fed President Loretta Mester, Boston Fed President Eric Rosengren and Kansas City Fed President Esther George are due to speak at public events.
Friday, May 13
Germany is to release preliminary data on inflation, while the euro zone is to release a revised estimate of first quarter economic growth.
The U.S. is to round up the week with data on retail sales, producer price inflation and consumer sentiment.