WASHINGTON (dpa-AFX) - Gold prices surged early in the trading day on Friday but have shown a significant downturn over the course of the session.
After jumping by as much as $56.70 an ounce or 1.4 percent to a high of $4,259 an ounce, gold for December delivery has slid $35.10 or 0.8 percent to $4,167.20 an ounce.
The price of the precious metal initially advanced following the release of a closely watched Labor Department report showing much weaker-than-expected job growth in the month of September.
The report said non-farm payroll employment rose by 29,000 jobs in September after jumping by a downwardly revised 133,000 jobs in August, while economists had expected employment to increase by 85,000 jobs.
The Labor Department also said the unemployment rate ticked up to 4.2 percent in September from 4.1 percent in August. Economists had expected the unemployment rate to remain unchanged.
The report initially led to a steep drop in treasury yields amid optimism the data will reduce the chances the Federal Reserve will once again raise interest rates later this month.
However, gold prices have subsequently turned lower amid a rebound by treasury yields, which have bounced well off their lows and into positive territory.
The respective turnarounds by gold and treasury yields come as some economists have suggested the weaker-than-expected jobs data will not dissuade the Fed from raising rates.
'The softer than expected September employment report makes a rate hike at the October meeting a closer call,' said Nancy Vanden Houten, Lead US Economist at Oxford Economics.
She added, 'However, we think the upside risks to inflation are still a bigger concern for the Federal Reserve and expect they will raise rates at the end of the month.'
CME Group's FedWatch Tool is currently indicating a 21.6 percent chance the Fed will hike rates by another quarter point at its October 27-28 meeting.
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