Gold futures moved higher Friday, on track for a weekly rise, as traders awaited a January jobs report that’s expected to be muted — or to even show a fall in nonfarm payrolls — as a result of the spread of the omicron variant of the coronavirus that causes COVID-19.
Gold for April delivery
was up 13.5 cents, or 0.6%, at $22.51 an ounce. Gold was headed for a weekly rise of 1.4%, while silver has advanced 0.9%.
Gold has gained ground despite continued expectations the Federal Reserve will move aggressively to raise interest rates, likely beginning in March, this year and take other actions to withdraw monetary stimulus in an effort to rein in inflation. Recent stock-market volatility may be providing some haven-related support for the yellow metal, analysts said.
“While gold would typically come under threat in an environment where interest rates are rising due to its lack of a yield, its appeal as a haven asset at times of crisis and stock market plunges suggest that investors continue to see value in holding gold and it is premature to write the economic recovery story,” said Rupert Rowling, market analyst at Kinesis Money, in a note.
Attention on Friday morning is focused on the January jobs report, due to be released at 8:30 a.m. Eastern. Economists surveyed by The Wall Street Journal forecast a rise of 150,000, which would be the smallest increase in 13 months. But economists also warned that payrolls could fall.
Payrolls are expected to be weak because the spread of the omicron variant was peaking at the time when the government was compiling labor data last month. Hourly workers without paid sick leave that were absent from their jobs wouldn’t be counted as employed despite still having jobs. The unemployment rate, which is compiled differently, is expected to show little impact from omicron, with economists forecasting it to remain unchanged at 3.9%.
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Investors and traders, as a result, might look past a weak payrolls figure in anticipation of a sharp rebound in February, analysts said.