Gold inches up, as solid U.S. jobs figures portend a September rate hike

Investing.com — ticked up on Friday amid a relatively flat dollar, in spite of solid U.S. employment figures last month which provided further indications that the Federal Reserve could raise short-term interest rates in September for the first time in nearly a decade.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,082.10 and $1,098.90 an ounce, before settling at $1,093.50, up 3.40 or 0.32% on the session. For the week, the precious metal experienced little fluctuation closing near its opening level on Monday of $1,095.10. Gold is still down more than 9% from mid-June when it peaked above $1,200 an ounce.

Gold likely gained support at $1,079.20, the low from July 31 and was met with resistance at $1,104.90, the high from July 27.

On Friday morning, the U.S. Department of Labor's Bureau of Labor Statistics said the number of non-farm payrolls in the nation during the month of July increased by 215,000, in line with consensus estimates of a 212,000 gain. The figure received a boost from a 60,000 gain in Trade & Transportation jobs, as well as a 40,000 increase in Professional & Business service positions. The Labor Department also upwardly revised non-farm payrolls for June by 8,000 to 231,000.

In addition, waged ticked up by 0.2 % after remaining flat in June – representing an increase of 2.1% on a year-over-year basis. The unemployment rate remained unchanged at 5.3%, also in line with consensus estimates of 5.3%. Earlier this week, Fed governor Jerome Powell said he would take a data-driven approach to the timing of a September rate hike, placing particular emphasis on the strength of the labor market over the next month.

The U-6 unemployment rate, a broader gauge of the national employment situation, inched down 0.1% to 10.4% on the moth. The reading, which measures the total level of unemployed workers plus those marginally attached to the labor force, as well as those who are no longer looking for a job but have looked for one over the last 12 months, stood at 12.6% last July. By comparison, the U-6 rate peaked above 17% during the height of the financial crisis. It is also a preferred measure of Fed chair Janet Yellen, as she weighs whether the labor market has improved to the point which would warrant an imminent rate hike.

Gold, which is not attached to the dividends or interest rates, struggles to compete with high-yield bearing assets in rising rate environments.

The dollar, meanwhile, moved broadly higher following the release of the report, before falling back in U.S. afternoon trading. The , which measures the strength of the greenback versus a basket of six other major currencies, surged to a four-month high at 98.41 before turning negative for the session at 97.67, down 0.21%.

Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.

Silver for September delivery gained 0.173 or 1.18% to 14.850 an ounce.

for September delivery fell 0.009 or 0.37% to 2.332 a pound.