Sharply Higher Following US Payrolls Data

Gold is 0.4% lower in the Asia-Pac session, after closing 1.5% higher at $2392.16 on Friday following weaker-than-expected US labour market data. Friday’s move took the gain last week to 2.7%.

• US Treasury yields declined following weaker-than-expected labour market data led by the front end. The 10-year yield fell 8bps to 4.28%, ending the week at the yield lows. The 2-year finished 10bps richer at 4.60%, the lowest since late March.
• US Treasury yields briefly gapped higher in response to mildly higher than expected June jobs gain of +206k vs. +190k est but quickly reversed course, extending session lows after prior jobs data was down-revised. Two-month -111k, split evenly over May and April. Private sees surprises lower though, 136k (cons 160k) and a -86k two-month revision skewed slightly to April.
• Lower rates are typically positive for gold, which doesn’t pay interest.
• From a technical perspective, gold continues to trade inside a range for now. A clear break of initial firm resistance at $2,387.8, the Jun 7 high, would be a bullish development. Key resistance is at $2,450.1, the May 20 high.
• Silver was also up by ~3% on Friday, leaving the precious metal 7.7% higher on the week.