Gold hitting record highs on Fed rate cut bets

gold extended its stunning rally to the eighth day on Friday as the US nonfarm payroll report of February was weaker than expected. The metal rose to a fresh record high as it hit $2195 before closing with a gain of 0.89% at $2179. It posted a whooping weekly gain of 4.60%.

The US employers added 275K jobs in February, which was above the forecast of 200K jobs; however, the unemployment rate rose to a two-year high of 3.90% from 3.70% in January and was way above the forecast of 3.70%. Moreover, the previous two-month figures were revised lower by 167K jobs and government hirings accounted for 52K jobs, which took the sheen off the headline number. Average hourly earnings m-o-m came in at 0.10% versus the forecast of 0.20%, while y-o-y earnings at 4.30% met the forecast though it was lower than the prior data of 4.40%. Labour force participation at 62.50% was lower than the estimate of 62.60%.

The US bonds rallied on a soft job report, though the ten-year yields recovered nearly 1% from the day's low to close with a loss of 0.26% at 4.08%. The ten-year yields were down nearly 2.50% on the week, whereas the two-year yields fell 0.57% to close at 4.48% Friday and were down nearly 1.50% on the week. The US Dollar Index closed lower for the sixth straight day Friday and was down around 1% on the week.

The US treasury will sell $117 billion in treasury coupons from Monday to Wednesday, so investors sold into Friday's bond rallies, which kept a floor under the falling yields, which in turn capped the gains in gold,