Oil and industrial metals fell in recent commodities spread trading activity as US jobs data for June showed employers hired the fewest workers in nine months, making investors jittery about the outlook for raw materials demand.
In agricultural markets, corn, wheat and soybean prices rose as forecasters called for hotter and drier weather in the US Midwest.
Trading was volatile as investors took in conflicting signals about the global economy. The US Labour Department said nonfarm payrolls rose by 18,000, far fewer than the 90,000 new jobs economists had forecast and the weakest reading since September 2010. The unemployment rate rose to 9.2 percent, its highest since December 2010.
CFD trading investors were still fretting over the weak Greek and Portuguese economies, and gold was seen as a hedge against holding the euro.
Gold prices posted their biggest weekly rise since November 2009, achieved after weak US labour market data renewed fears about the health of the world’s biggest economy and spurred safe-haven buying. US payrolls growth ground to a near halt in June, as employers hired the fewest workers in nine months, frustrating hopes that economic growth would pick up pace in the second half of the year.
Instead, some CFD analysts and investors began speculating about how quickly a next government stimulus plan might be enacted in the United States, triggering safe-haven purchases. The dollar dropped against several currencies as the US jobs data strengthened expectations the US Federal Reserve would leave interest rates low into next year, prompting investors to embrace alternate safe-haven assets like gold.
A weaker dollar also often boosts dollar-denominated assets, such as gold, because of the advantage it provides buyers outside the United States.
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