The job rate in the United States rose last September and the unemployment rate fell to 4.1%, and this further reduced the need for the Federal Reserve (the US central bank) to continue to reduce interest rates by large percentages in its remaining two meetings this year.
Today, Friday, the Bureau of Labor Statistics of the Department of Labor said in its closely followed jobs report that non-farm payrolls increased by 254,000 jobs last month after rising by an upwardly revised 159,000 jobs in the previous August.
The unemployment rate fell to 4.1% from 4.2% last August.
The US Central Bank began the monetary easing cycle by significantly reducing interest rates by half a percentage point last month.
Gold decline
Gold prices fell today, Friday, after the jobs data, and this prompted traders to reduce their bets that the US Federal Reserve will cut interest rates by another 50 basis points at its meeting next November.
Gold fell in instant transactions by 0.6% to $2,640.61 per ounce by 13:03 GMT, after jumping to its highest level ever at $2,685.42 on September 26.
US gold futures also fell 0.7% to $2,660.90.
Gold is considered a safe investment during times of political and financial uncertainty, and it also thrives in times of lower interest rates.
As for other precious metals:
- Silver fell in spot transactions by 0.9% to $31.74 per ounce, but it is heading for a weekly gain.
- Platinum rose 0.3% to $993.40.
- Palladium rose 0.4% to $1,004.00.
The dollar is rebounding
The dollar rose today, Friday, to its highest level in 7 weeks after the jobs data in America, and is on its way to achieving a weekly gain.
The dollar index – which measures the performance of the US currency – against 6 major currencies, reached 102.64 points, the highest level since last August 16, after traders reduced their bets on the possibility of lowering interest rates.
The euro fell to $1.0959, the lowest level since August 15.
The dollar rose to 148.80 yen, the highest level since August 16.
The improvement in economic data prompted traders to reduce their bets on reducing the cost of borrowing by 50 basis points at the next central bank meeting.
According to data from CME Group’s Fed Watch, traders currently see an 11% chance that the Federal Reserve will cut interest rates by 50 basis points, down from expectations of 28% earlier on Friday.
