Investing.com -- Gold prices fell slightly early Friday in New York, while bond yields rose after the monthly labor report showed the U.S. economy still adding jobs at a decent rate in September.
By 10 AM ET (1400 GMT), gold futures for delivery on the Comex exchange were down 0.6% on the day at $1,505.15 a troy ounce. Spot gold was down 0.4% at $1,499.44.
The yields on U.S. Treasury bonds rose, meanwhile, with the two-year Treasury note rising to 1.42% from 1.38% immediately before the jobs report.
Rising yields make bonds more attractive relative to gold, which offers no nominal return.
The unemployment rate fell to a 50-year low as 136,000 jobs were created. While that’s down from last month, August’s number was revised sharply higher to 168,000.
At the same time, though, average hourly earnings stagnated over the month, breaking a string of solid gains in recent months. They’re now up only 2.9% on the year, having run north of 3% for most of 2019.
In all, the figures were enough to make market participants trim the bets on future interest rate cuts from the Federal Reserve, which they had made earlier in the week on a succession of dire-looking business surveys.
According to Investing.com’s Fed Rate Monitor Tool, the implied odds of another 25 basis-point cut at this month’s Fed policy meeting retraced to 77%, after rising to nearly 87% in the aftermath of the Institute for Supply Management’s monthly purchasing manager indices earlier in the week. Those had both fallen to multi-year lows.
“The issue is not that the U.S. economy and labour markets are weak, but that a collapse in confidence slows activity below the economy’s historically low stall speed,” Lena Komileva, managing director of the G+ economics consultancy, said via Twitter. That triggers “a recessionary vicious cycle in confidence, capital market (volatility) and U.S. balance sheet health.”
Whether this week’s numbers have been enough to change the Fed’s thinking about the need for further interest rate cuts may become a little clearer at 2 PM ET, when Chairman Jerome Powell is due to speak.
Among other haven assets, silver futures fell 1.0% to $17.51 an ounce, while platinum futures fell 1.4% to $882.15 an ounce.