Buying on dips likely to support gold prices

economictimes.indiatimes.com:

gold closed almost flat at $1,940 on Friday as US treasuries fell, despite a weak monthly US job report. The surge in yields on Friday boosted the US dollar index, thus mitigating the impact of a weak job report. However, the yellow metal was up nearly 1.37% for the week as yields were lower in the week ending September 1.

The US non-farm payroll report for August was softer than expected.

Although the headline job figure of 187k was higher than the consensus estimate of 170k jobs, July's data was revised lower by 30k, extending the streak of downward revisions in monthly job reports, which has been a notable characteristic this year. The labor force participation rate jumped to 62.80% from 62.60% in July, reaching the highest level since February 2020. This increase could have contributed to the rise in the unemployment rate from 3.50% in July to 3.80% in August.

Consequently, the increased labor force participation rate is expected to alleviate wage pressure to some extent, thus reducing wage inflationary pressures.

The US temporary help jobs declined 0.70% from July, which marked the third consecutive monthly decline. Its significance lies in the fact that employers start cutting down the workforce with temporary jobs, which increases the possibility of mounting job losses ahead. Average hourly earnings in August slipped to 0.20% from 0.40% in July and fell short of expectations of a 0.30% rise.

Average hourly earnings on a YoY basis were recorded at 4.30%, which matched the forecast.

Two-month payroll revision was -110k jobs. Hours worked data was a positive point in the job report as the average weekly hours for all employees at 34.40 topped the forecast of 34.30 hours. US ISM manufacturing PMI data (August)