Big jump in gold prices

Gold prices rose more than 1 percent in international markets on Friday (October 2) after weaker-than-expected jobs data in the United States eased fears that the country's central bank, the Federal Reserve, would raise interest rates this month. However, gold prices have been on a downward trend throughout the week as the dollar's strength and US Treasury bond yields continue to remain high.

At 9:05 PM Bangladesh time, the price of gold per ounce in the spot market rose 1.1 percent to $4,223.49 cents. However, the price has decreased by about 1.5 percent for the week. On the other hand, the price of US gold futures rose 1.2 percent to $4,254.10 cents per ounce.

According to US government data released on Friday, the country added just 29,000 new jobs outside the agricultural sector in September. The revised figure for August was 133,000 jobs. Previously, the employment increase in August was reported to be 162,000.

Economists polled by Reuters had forecast 90,000 new jobs would be created in September. The actual job growth was much lower than that forecast.

The US dollar fell slightly after data showed a slowdown in employment growth. However, the dollar is on track to remain strong for the week. On Thursday, US 10- and 30-year Treasury bond yields hit their highest levels since 2002.

According to the CME FedWatch tool, traders saw a 28 percent chance of a U.S. interest rate hike this month before the jobs report was released. That has fallen to about 14 percent since the data was released. The probability was about 70 percent at the start of the week.

Market analyst Edward Meyers said that the dollar has weakened as expectations of interest rate hikes have eased, which has contributed to the increase in gold prices. In addition, the gold market has recently experienced an excessive decline, which has led to a slight recovery in prices.

However, he warned that the technical picture of the market is not yet very promising. If the trend of increasing interest rates resumes, the price of gold could fall further.

Recent lower-than-expected inflation data in the United States and opposition from at least two top Federal Reserve policymakers to another rate hike in October have also bolstered expectations that interest rates will remain unchanged this month.

Gold prices have fallen by about 20 percent since the US-Israeli war over Iran began in late February of this year. Fears that the war could lead to higher inflation and prolonged high interest rates have put pressure on gold prices.

"Market participants are aware that the Federal Reserve still considers price stability as its main objective," said Han Tan, chief market analyst at Bybit. "However, if Treasury bond yields are indeed at record highs, gold prices could rise further in the short term in the spot market."

Meanwhile, silver prices rose 2 percent to $62.70 an ounce in the spot market on Friday. Platinum prices rose 1 percent to $1,740.53 and palladium prices rose 2.2 percent to $1,197.47. However, the prices of these three precious metals are also on the decline for the week.

Source: Reuters