02:00 PM EDT, 07/05/2024 (MT Newswires) -- (Updates prices.)

Gold prices rose midafternoon on Friday as U.S. hiring slowed sharply in June, supporting expectations the Federal Reserve could move to lower interest rates as soon as September.

Gold for August delivery was last seen up US$28.40 to US$2,397.80 per ounce.

The Bureau of Labor Statistics reported U.S. non-farm payroll employment rose by 206,000 jobs in June, down from 272,000 a month earlier, though ahead of the consensus estimate for a rise of 200,000 positions, according to Marketwatch.

The report is the latest to show the U.S. economy is slowing, raising hopes the Fed will begin cutting interest rates as inflation slows. While the central bank is not expected to lower rates at the month-end meeting of its policy committee, the odds of a later cut are rising, with the CME Fedwatch tool seeing a 71.8% probability that rates will decline beginning at the Sept.18 meeting.

Gold is "supported by further signs that the U.S. economy is slowing, thereby raising the prospect of the Federal Reserve pivoting towards more than just one rate cut this year", Ole Hansen, head of commodity strategy at Saxo Bank noted.

The dollar fell following the report, with the ICE dollar index last seen down 0.15 points to 104.98.

Treasury yields were also sharply lower, bullish for gold since it offers no interest. The U.S. two-year note was last seen down 10.7 basis points to 4.654%, while the yield on the 10-year note was down 8.4 points to 4.28.