Investing.com -- Gold futures surged 2% on Friday, enjoying their strongest one-day move in more than a month, as a downbeat U.S. jobs report bolstered the case for a delayed interest rate hike by the Federal Reserve.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,103.80 and $1,140.90 an ounce before settling at $1,135.90, up $22.10 or 2.00% on the session. Gold fell to a three-week low in overnight trading, before staging a dramatic rally following the release of the lackluster job figures. Previously, the precious metal had closed in the red in four consecutive trading days, including two losing sessions of more than 1% earlier this week.
Gold likely gained support at $1,098.20, the low from September 11 and was met with resistance at $1,155.90, the high from Sept. 24.
On Friday morning, the U.S. Department of Labor's Bureau of Labor Statistics said non-farm payrolls for the month of September increased by 142,000, significantly below consensus estimates from analysts of a 203,000 gain. The figure also fell well below low end of estimates of a 180,000 increase. Severe declines in manufacturing and mining employment restrained overall job gains as the sectors lost 9,000 and 13,000 positions respectively. A month earlier, the manufacturing industry lost 18,000 jobs in August, while mining positions nationwide decreased by 22,000.
There were other signs of weakness within the dreary report. After surging by 0.3% on a monthly basis in August, hourly wages remained unchanged in September. Analysts expected hourly earnings to tick up on the month by 0.2%. On a yearly basis, hourly wages were only up 2.2% over the last 12 months. The labor participation rate also fell by 0.2% to 62.4%, providing indications that that the labor market is shrinking.
The unemployment rate, meanwhile, held steady at 5.1% in line with analysts' expectations. The U-6 unemployment rate, a broader gauge of the employment situation in the U.S., fell 0.3% to 10.0%. The rate, which is a preferred measure of unemployment by Fed chair Janet Yellen, tracks the number of workers marginally attached to the labor force as well as part-time workers. Last September, the rate peaked at 11.7%. Marginally attached workers are defined as those who are not working or not looking for work, but have looked for work over the last 12 months.
Last month, the Federal Open Market Committee sent strong indications that it wanted to see continued improvement in the labor market before it hiked short-term interest rates for the first time in nearly a decade. Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in periods of rising rates.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.70% to an intraday low of 95.30, its lowest level in two weeks. One day earlier, the index reached as high as 96.64, its highest level in a month. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for December delivery jumped 0.699 or 4.82% to $15.210 an ounce.
Copper for December delivery gained 0.021 or 0.92% to 2.326 a pound.