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“With the complete miss on the (jobs) number, yields are going to compress and the dollar also fell, allowing gold to shoot up,” Phillip Streible, chief market strategist at Blue Line Futures in Chicago, told Reuters.
However, gold’s rally may be short lived since next month’s jobs data could show a “blow out” number, Streible cautioned.
April’s non-farm payrolls rose by only 266,000 jobs, with employers likely frustrated by labor shortages as the economy reopens.
“This report at least temporarily throws some cold water on notions the Federal Reserve may be forced to raise interest rates much sooner than many expected,” Kitco Metals senior analyst Jim Wyckoff said in a note.
The dollar extended declines on Friday, while US Treasury yields also retreated, lowering the opportunity cost of holding non-interest bearing bullion.
“Gold could push towards $1,857, followed by the $1,925 resistance level,” Edward Moya, senior market analyst at OANDA, wrote in a note.
(With files from Reuters)