On 2/7, the world's spot gold price rose 91 USD to 4,121 USD an ounce at the close of trading. This morning, the price continued to inch up, currently trading at 4,125 USD.

The market moved higher following a weaker-than-expected jobs report, which reduced the likelihood of the US Federal Reserve (Fed) raising interest rates this year. Additionally, the dollar index – which tracks the greenback's strength against six major currencies – fell 0,5% yesterday, making gold cheaper for non-US buyers.

"Gold tends to perform better in a low interest rate environment. We believe much of the strength in the gold market is based on this," commented David Meger, director of metal trading at High Ridge Futures.

World gold prices rose sharply on 2/7. *Chart: Kitco*.

A US Department of Labor report indicated that the economy added 57,000 new jobs last month, significantly lower than economists' forecast of 110,000. The unemployment rate remained at 4,2%. An earlier report also showed slower-than-expected growth in private sector jobs in June.

Investors are now pricing in a 51% chance of a Fed rate hike in September, down from 66% before the jobs data was released.

On 1/7, Fed Chair Kevin Warsh noted that inflation expectations and inflationary pressures had cooled in recent weeks. Nevertheless, he reiterated his commitment to bringing US inflation back to the 2% target.

The World Gold Council (WGC) reported that central banks resumed gold purchases in May. Based on the latest published data, official gold reserves increased by a net 41 tons this month.

In the Middle East, Iran and the US concluded indirect talks on 1/7, but there were no signs of significant progress towards a lasting peace agreement.

Beyond gold, other metals also saw price increases. Silver prices rose more than 3% to 61 USD an ounce. Platinum and palladium also became 3-4% more expensive.

By Ha Thu (Reuters)