Gold rises, yields retreat after softer US jobs data

Gold prices gained on Wednesday as bond yields fell after weaker-than-expected US private payrolls data bolstered expectations that the Federal Reserve would cut interest rates later this year, reports Reuters.
Spot gold was up 0.8 per cent at $2,346.99 per ounce, as of 1449 GMT, after a 1 per cent fall in the previous session. US gold futures rose 0.8 per cent to $2,367.20.
Benchmark US Treasury yields fell to their lowest since April 5 after data showed US private payrolls increased less than expected in May.
A weak labour number adds fuel to the fire that the Fed may have to cut rates before year end, boosting gold's appeal, said Bob Haberkorn, senior market strategist at RJO Futures. Lower interest rates decrease the opportunity cost of holding non-yielding gold.
According to the CME FedWatch Tool, traders now see about a 67 per cent chance of a Fed rate cut by September, versus below 50 per cent last week.
"An upside print in the NFP could see the expected timeline for the first rate cut shift back in favour of November, while a downside miss could see September firm as the favoured month for potential action from the Fed," Tim Waterer, chief market analyst at KCM Trade, said in a note.
On the physical front, net purchases of gold by global central banks rose to 33 metric tons in April from a revised net buying of 3 tons in March, the World Gold Council (WGC) said, signalling the sector's continuing strong appetite for the metal despite high prices.
Among other precious metals, spot silver rose 0.7 per cent $29.68 per ounce, platinum was up 0.4 per cent at $991.00 and palladium gained 2.1 per cent to $934.50.