GOLD HITS ONE-MONTH HIGHS

GOLD ADVANCED 1 percent to its highest in a month on Friday, as a surprise slowdown in US jobs growth in August drove the dollar lower, casting doubts on the Federal Reserve’s tapering timeline.

Spot gold price rose 0.8 percent to $1 824.20 (about R26 267) an ounce by 4.19pm, after hitting its highest since August 4 at $1 829.31 an ounce, for a fourth consecutive weekly gain.

US gold futures were 0.8 percent higher at $1 826 an ounce.

US job growth came in well below expectations in August amid a jump in Covid-19 infections.

The dollar index slipped soon after the report, bolstering gold’s appeal for those holding other currencies.

“Gold received a welcome boost from a much weaker (jobs) report,” said Saxo Bank analyst Ole Hansen.

Fed chairperson Jerome Powell said a fortnight ago that if employment growth continued, the Fed could start cutting asset purchases this year, but would remain cautious about raising interest rates.

“The knee jerk reaction was positive for gold as a big miss with the headline number pretty much ruled out a September taper,” said Ed Moya, senior market analyst at foreign exchange brokerage Oanda, putting it on course for a break toward $1 850 an ounce.

Some investors view gold as a hedge against higher inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion.

“Market focus will shift to the September FOMC meeting next. We continue to see further upside risk for gold in light of our expectations for the USD to weaken and real yields to remain deeply negative,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.

Silver gained 2.8 percent to $24.54 an ounce while platinum was 1.8 percent higher at $1 016.50 an ounce. Palladium rose 0.6 percent to $2 415.18.