Gold prices rose during Friday’s trading as the US dollar fell against most major currencies following the release of the monthly jobs report, which strengthened bets that the Federal Reserve will resume cutting interest rates at its upcoming meeting this month.

Data released Friday by the US Department of Labor showed the economy added only 22,000 jobs in August, compared with expectations of 75,000, a highly negative report.

The data also revealed that the unemployment rate in the US labor market rose to 4.3% in August, in line with analysts’ expectations.

After these figures, market bets increased that the Federal Reserve will cut interest rates at this month’s meeting, with the probability of a rate cut rising to about 98%, according to the CME FedWatch tool.

Meanwhile, the US dollar index fell 0.6% to 97.7 points at 20:10 GMT, after reaching a high of 98.2 points and a low of 97.4 points.

As for trading, spot gold rose 1.1% to $3,647.3 an ounce at 20:55 GMT, with the precious metal posting a 4% gain for the week.

Federal Reserve policymakers appear ready to begin a series of interest rate cuts this month to support a labor market that is becoming increasingly fragile, after a government report on Friday showed job growth nearly stalled and unemployment rose in August.

Although Fed Chair Jerome Powell will likely tread carefully with only 22,000 jobs added last month amid lower immigration rates, the rise in unemployment to 4.3%—the highest since October 2021—will sound alarm bells. With employers hiring at a very slow pace, Powell said last month that any increase in layoffs—still at historically low levels—could trigger a sharp jump in unemployment.

Friday’s data also showed that more than a quarter of the unemployed have been looking for work since at least February, just weeks after President Donald Trump began his second term in the White House. Unemployment among African Americans—who tend to be more vulnerable to labor market swings—rose to 7.5%.

The Fed will receive fresh inflation data next week as policymakers prepare for their September 16–17 meeting. Consumer prices are expected to accelerate further as Trump’s tariffs put greater upward pressure on the cost of basic goods.

Nevertheless, weaker-than-expected jobs data has pushed concerns about labor market deterioration to the top of the Fed’s priority list. The central bank has kept its benchmark rate in the 4.25%–4.50% range all year.

Analysts at Bank of America said after the jobs report: “The August jobs report should cement the Fed’s shift from worrying about inflation to focusing on labor market weakness.” They now expect a quarter-point cut in September and another in December, with the benchmark rate falling to 3.00%–3.25% by the end of next year.

Why Did Unemployment Rise?

In recent months, unemployment remained low, but not for ideal reasons; the main factor was shrinking labor force participation.

In August, however, unemployment rose partly because more people reentered the labor market to look for jobs, according to the Bureau of Labor Statistics (BLS).

The latest household survey data showed the labor force, which had contracted for three straight months, grew by 436,000 people in August. Labor force participation also rose to 62.3% from 62.2%.

While most of this growth came from people classified as employed, the rise in the number of unemployed was largely due to those reentering the labor market and actively seeking work.

Jennifer Timmerman, senior investment strategist at Wells Fargo Investment Institute, wrote in a Friday note: “In fact, the average job search duration fell to a three-month low, which is a bright spot in what was otherwise a weak jobs report.”

Trump’s Pressure

At the annual Jackson Hole symposium two weeks ago, Powell hinted at a possible September cut by highlighting downside risks in the labor market, though he also noted that a stable jobs environment would allow the Fed to “proceed cautiously.”

Kevin Hassett, the White House economic adviser, said Friday that the latest jobs report could push the Fed to consider a larger cut this month. This view aligns with Trump’s persistent demands for lower borrowing costs, part of his growing efforts to assert control over the central bank. Hassett is among the names Trump has said he is considering to succeed Powell when his term ends in May.

Even so, markets still see an outsized cut this month as unlikely. Futures tied to interest rates show only about a 10% chance of a half-point cut in September, up from zero before the jobs report.

Most expectations remain centered on a quarter-point cut, with similar moves likely in subsequent meetings, and nearly a 50-50 chance that the benchmark short-term rate will be a full percentage point lower by January compared with today.

Not all analysts ruled out a stronger response. Simon Dangoor, head of fixed-income macro strategies at Goldman Sachs Asset Management, said: “Today’s data suggests there’s a risk the Fed begins easing at a faster pace than the cautious path Powell outlined at Jackson Hole.”

US stock indexes fell on Friday during trading after an initially positive opening toward new record levels, as investors assessed the impact of the negative employment data.

The data released today by the US Department of Labor showed that the US economy added only 22,000 jobs during August, compared with expectations of 75,000 jobs, which is considered a very negative report.

The data also showed that the unemployment rate in the US labor market rose to 4.3% during August, a reading that was consistent with analysts’ expectations.

On trading, the Dow Jones Industrial Average fell by 0.4% (equivalent to 190 points) to 45,434 points by 15:25 GMT, the broader S&P 500 index declined by 0.3% (equivalent to 22 points) to 6,480 points, while the Nasdaq Composite fell by 0.2% (equivalent to 55 points) to 21,652 points.

Copper prices rose on Friday as the US dollar weakened and hopes grew for stronger demand in China, ahead of the US jobs report later in the session which may provide further clarity on the path of US interest rates.

The three-month copper contract on the London Metal Exchange gained 0.5% to $9,947 per metric ton in official trading. The contract had touched its highest level in five months at $10,038 on Wednesday, driven by mounting expectations of a US rate cut later this month.

Lower interest rates improve the outlook for growth-linked metals, while the decline in the US currency—last down 0.3%—makes dollar-priced metals more attractive to holders of other currencies.

Highlighting the continued tightness in copper concentrate supplies that is pressuring Asian smelters, JX Advanced Metals, one of Japan’s largest copper smelters, said it may cut production by tens of thousands of tons in the fiscal year ending March.

In the US, inventories in Comex-owned warehouses—which are already at their highest in 22 years—continued to rise this week, supported by the ongoing premium of Comex copper contracts over the London Metal Exchange benchmark, recently ranging between 1% and 2%.

That premium had narrowed at the end of July after Washington excluded refined copper from import tariffs on certain copper products, but the reduction was not sufficient to trigger stock drawdowns from the US, according to one trader.

Meanwhile, inventories in London Metal Exchange warehouses remained broadly steady after rising 74% since late June, keeping the cash discount to the three-month contract at $61 per ton.

Analysts at Macquarie said in a note: “Even with the copper market still distorted by US inventory builds, the weaker spreads in London suggest oversupply outside China, but any weakness in prices appears to be met with strong Chinese buying.”

The Yangshan copper premium—reflecting demand for imported copper into China—held steady on Friday at its highest level in three months at $57 per ton.

Other Metals Prices

Aluminum rose 0.8% to $2,612 per ton.

Zinc climbed 0.7% to $2,864.5 per ton.

Lead gained 0.5% to $1,995 per ton.

Tin rose 0.3% to $34,675 per ton.

Nickel advanced 0.3% to $15,275 per ton.