By Amrith Ramkumar and Christopher Alessi
Gold prices closed slightly higher Friday after swinging between small gains and losses following the latest jobs report, which showed the U.S. economy added fewer jobs than expected in December.
Front-month gold for January delivery closed up 0.1% at $1,320.30 a troy ounce on the Comex division of the New York Mercantile Exchange, paring earlier losses to notch an 11th straight session of gains. Prices have risen in four straight weeks, the longest streak since June.
Friday's jobs report showed employers added 148,000 jobs in December, fewer than the 180,000 economists expected, while the unemployment rate held steady at 4.1%. Average hourly earnings rose 2.5% in December from a year earlier, matching estimates from economists.
The report is the latest reading on the economy that could keep the Federal Reserve at a gradual pace of rate increases amid tepid inflation, according to some analysts. The Fed is penciling in three more rate increases in 2018, but some investors had anticipated that the central bank could get more aggressive depending on economic data and membership changes throughout the year.
"This jobs number did not change the outlook for the Fed whatsoever," said Bob Haberkorn, senior market strategist at RJO Futures. "There wasn't much in that report."
For now, roughly 50% of traders tracked by CME Group expect two or fewer rate increases this year.
"I think the market has been pricing that doubt across the board," said Darwei Kung, commodities portfolio manager at Deutsche Asset Management, Still, "we think the potential for change is pretty high throughout the year," he said.
Gold struggles to compete with yield-bearing assets like Treasurys as borrowing costs rise.
A weaker dollar has boosted gold recently by making the dollar-denominated commodity cheaper for overseas buyers. On Friday, the WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, rose less than 0.1% following its lowest close since September. Gold rose late in the session as the dollar pared some of its earlier gains.
Among base metals, front-month copper for January delivery fell 1.1% to $3.2070 a pound. Prices are still near their highest level since 2014, supported by robust demand from China, the world's largest consumer, and supply disruptions.
Write to Amrith Ramkumar at [email protected] and Christopher Alessi at [email protected]