Gold rises over 1% buoyed by dollar slide, weak ADP employment data

Gold prices rose over 1% on Thursday

supported by a dip in the dollar and data showing U.S. private

payrolls rose less than expected last month.

Spot gold rose 1.2% to $1,868.41 per ounce by 1:46

p.m. ET (1746 GMT), having earlier risen to a one-week high.

U.S. gold futures also settled up 1.2%, at $1,871.4.

The dollar index was down 0.7%, slipping off a

one-week high touched on Wednesday.

“(The job data) is really raising the recession concerns

that have been brewing in the market and supporting gold,” said

Ryan McKay, commodity strategist at TD Securities

ADP National Employment Report data showed private payrolls

rose by 128,000 jobs last month versus forecast for an increase

of 300,000 jobs.

While the Fed is trying to dampen demand for labor as it

tries to tame soaring inflation, it needs to do so without

pushing the unemployment rate too high.

Investors will now keep a close eye out on Friday’s nonfarm

payrolls data.

“All the pieces of this morning are pointing towards

continued inflation and possibly the Fed not been able to

address it as aggressively as they hope due to weakening

employment numbers,” RJO Futures senior market strategist Bob

Haberkorn said.

Fed Vice Chair Lael Brainard on Thursday said she backs at

least a couple more half-point interest rate hikes, with more on

tap if price pressures fail to cool.

While bullion is considered a safe haven during times of

political and economic uncertainty, higher interest rates

increase the opportunity cost of holding gold, which bears no

interest.

Spot silver rose 2.1% to $22.26 per ounce.

Platinum gained 2.7% to $1,023.69, rising to $1,030.9

earlier, its highest since last March.

Palladium was up 2.5% to $2,047.73, going as high as

5.5% to $2,107.15, its highest in two weeks.

Talks of progress in the chip market could get manufacturing

back up in the automotive industry, said Philip Streible, chief

market strategist at Blue Line Futures in Chicago.

(Reporting by Seher Dareen and Eileen Soreng in Bengaluru;

editing by Diane Craft and Krishna Chandra Eluri)