The U.S. Bureau of Labor Statistics reported that nonfarm payrolls increased by just 29,000 in September. That fell short of the consensus forecast of 89,000 jobs. The unemployment rate unexpectedly rose to 4.2%, up from 4.1%, signaling a cooling labor market.
The weaker report reduced expectations for further aggressive Federal Reserve rate hikes. The shift weighed on the U.S. dollar and Treasury yields, boosting demand for non-yielding gold.
Spot gold rose about 1% to around $4,223 an ounce after the release. The report provided a fresh catalyst for gold, which had faced pressure from a stronger dollar and rising yields. Investors will now watch how the weaker economic data affects upcoming Federal Reserve decisions.