Gold edges higher after US jobs report supports rate cut bets

Dec 6 (Reuters) – Gold prices inched up on Friday after the November U.S. job growth report suggested the labor market continues to ease gradually, leaving room for the Federal Reserve to cut interest rates again.

Spot gold gained 0.2% to $2,637.01 per ounce by 12:29 p.m. ET (1728 GMT). U.S. gold futures rose 0.4% to $2,659.80.

“The data was somewhere in between. We see the nonfarm payroll higher than the forecast, which could be a little bit of a bearish sentiment on gold in the short term, but the private payroll is slightly below the forecast almost by 9,000, this reaffirms the potential Fed cuts in the next couple of weeks,” said Alex Ebkarian, chief operating officer at Allegiance Gold.

The prospect of rate cuts, starting with the half basis point reduction in September, has underpinned gold’s record rally this year, as lower rates increase the appeal of holding non-yielding gold.

Traders now see an 87% chance of a 25-basis-point cut at Fed’s December meeting, versus a 72% chance before the payrolls data.

“This report falls mostly into the ‘Goldilocks’ camp, which means the data was not too hot and not too cold. That suggests the Fed can go ahead and cut interest rates at its December meeting,” said Jim Wyckoff, a senior market analyst at Kitco Metals.

Spot silver fell 0.8% to $31.11 per ounce, but was up for the week.

Platinum eased 0.8% to $930.50 and palladium was steady at $962.86. Both metals are set for a second straight weekly loss.

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