By Amrith Ramkumar and Ben St. Clair
Gold prices were slightly lower Friday after the latest jobs report showed the economy added more jobs than expected last month, while the unemployment rate edged slightly higher.
Gold for August delivery was down 0.2% on the Comex division of the New York Mercantile Exchange. Prices have edged higher since hitting a 2018 low earlier this week, though some analysts expect them to stay around their current levels with economic growth in the U.S. strong.
Friday's report showed the unemployment rate ticked up in June from an 18-year low, but steady hiring and an increased number of job seekers suggest a strong labor market drew in Americans from the sidelines. It was the latest steady reading on the U.S. economy that could dent demand for gold.
Some investors use gold to hedge against a pickup in inflation and downturn in stocks and other markets, but Friday's report is unlikely to change expectations for a rise in consumer prices and higher rates, said John Caruso, senior market strategist at RJO Futures.
"It's not really going to move the needle," he said. "We've already started to see the rest of the world diverge from the U.S."
Growth momentum shifting to the U.S. has pushed the dollar to its highest level of the year, hurting gold and other commodities by making them more expensive for overseas buyers. On Friday, the WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, was down 0.3%.
Analysts say the prospect of higher interest rates has also hurt gold by making Treasury yields more attractive to investors than the yellow metal. On Thursday, minutes from the Federal Reserve's last meeting showed the central bank plans to continue gradually raising rates to keep the economy from overheating.
Write to Amrith Ramkumar at [email protected]