02:00 PM EDT, 09/05/2025 (MT Newswires) -- Gold traded higher midafternoon on Friday, rising as the dollar and yields moved sharply lower after U.S. hiring stalled in July, firming expectations the Federal Reserve will move to lower interest rates beginning this month.

Gold for December delivery was last seen up US$44.10 to US$3,650.80 per ounce.

Following reports Thursday showing higher than expected U.S. initial jobless claims and a slowdown in private-sector hiring, the U.S. Bureau of Labor Statistics reported non-farm payrolls rose by just 22,000 new jobs in August, under the FactSet consensus estimate for 75,000 positions and down from 79,000 in July.

The weak data is firming already widespread expectations the Fed will move to lower interest rates for the first time this year at the Sept.17 end to the meeting of its policy committee. The CME FedWatch Tool shows a 98% probability for a 25 basis point cut.

"Investors have shifted into a wait-and-see mode as payroll and unemployment figures will likely set the tone for rate expectations," Saxo Bank noted.

The dollar was sharply lower following the employment data, with the ICE dollar index last seen down 0.7 points to 97.65. Treasury yields also plunged, with the yield on the U.S. two-year note last seen down 9.1 basis points to 3.507%, while the 10-year note was paying 4.084%, down 7.8 points.