Gold advanced and the dollar pushed lower after economic data showed the U.S. unexpectedly shedding jobs last month.
A report by the ADP Research Institute showed businesses’ payrolls fell by 301,000 last month, the most since April 2020, as the omicron variant of the coronavirus registered a swift yet likely temporary blow to the nation’s labor market. Also supportive to bullion was Euro-area inflation unexpectedly accelerating to a record, overshooting expectations by the most in at least two decades and fueling bets the European Central Bank could raise interest rates earlier than expected.
The weakness in the greenback this week is “preventing any more pronounced price slide” in bullion, said Daniel Briesemann, an analyst at Commerzbank AG. The eurozone inflation figures “could give gold something of a boost if the euro were to appreciate further in response and the U.S. dollar were to continue depreciating.”
None of the six Federal Reserve officials speaking so far this week have backed the idea of a half-point rate increase in March, and the most aggressive, James Bullard, president of the St. Louis Fed, said five hikes is “not too bad a bet.”
Still, bullion has lost 1.1% this year after the Fed’s more hawkish turn prompted investors to cut back long bets in the futures market.