By Rachel Koning Beals
Gold futures were switching between small gains and losses early Monday after the precious metal slipped lower following a stronger-than-expected report on U.S. hiring on Friday.
Still, gold and silver managed to log a sixth weekly gain, despite the Friday employment report, as investors expect the metals’ rise to be underpinned by global economic uncertainty and what’s still anticipated to be a go-slow approach to interest-rate increases at the Federal Reserve despite the June payrolls reading.
The strong, Friday labor-market report was seen as healthy enough to suggest that the U.S. economic recovery remains steady but not robust enough to spur the Fed to lift benchmark interest rates in a hurry.
Higher rates weigh on commodities, like gold, making them less attractive compared with assets that offer a yield. Rate increases also tend to boost the U.S. dollar and make dollar-pegged commodities more costly to buyers using other monetary units.
Gold’s recent run-up and its resilience has left some analysts questioning its ability to advance much further, especially given that stocks are flirting with record highs and the dollar has been on the rise.
The ICE U.S. Dollar Index DXY, +0.09% was up 0.2%. Gold and the dollar typically move inversely but did break that relationship in Monday trading.