Why Gold Prices Surged Following Jobs Data?

Gold prices rose on Friday, after data showed disappointing progress by the U.S. labor market, with a lower than expected increase in nonfarm payrolls during August, which increased concerns over the pace of recovery from the coronavirus pandemic.

The jobs report led to the decline of the Dollar Index (DXY) that measures the greenback against a basket of six major international currencies, which settled down for the day by 0.21% at 92.04, after breaking the 92 earlier in the session and going as low as nearly 91.94.

Meanwhile, gold futures for December delivery gained $22.20, or 1.2%, to close at $1,833.70 per ounce.

For the week, the yellow metal futures added 0.8%.

Meanwhile, silver futures leveled up by 88 cents, or 3.7%, finishing at $24.80 per ounce, increasing by 3.1% on a weekly basis.

U.S. nonfarm payrolls increased by 235,000 jobs in August, according to data released on Friday, the reading came below July’s increase, which was nearly triple the size, and also much below market expectations.