US jobs report: Gold is to surge if dollar is hit hard; Oil is expected to decline Monday

The US Labor Department reported Friday that employers added just 126,000 workers in March - a marked slowdown in hiring that echoed earlier signs of a winter pall on the economy.

The plunge in oil prices as well as the punishing weather in the Northeast were the main reasons for the decline, according to analysts, as they represent a combination that put a crimp on investment in the energy patch and construction and retail sales more broadly. But many still expect the economy to regain at least some of its momentum later this year, says the New York Times.

Analysts had expected 243,000 new jobs for most of the week. Some lowered expectations to 220,000 new jobs after a weak ADP private jobs report on Wednesday. The government also reduced February’s reading by a combined 69,000. The unemployment rate was unchanged at 5.5%, its lowest since May 2008.

The downbeat figures mean that investors started doubting that the Fed will raise rates in June, and a number of traders were doubtful whether the move will happen in September.

Traders expect high volatility on Monday, as today markets were closed in the U.S. and Europe for Good Friday.

Given the weak jobs report, the EUR/USD and GBP/USD are expected to find support. Gold could be largely boosted if the U.S. Dollar gets hit hard.

Crude oil prices are expected to open lower on Monday because of the Iran nuclear deal, but losses may be limited by a weaker dollar. Iran reached a preliminary deal with six world powers over its nuclear program late Thursday. Easing of sanctions against Iran could mean the country will be allowed to export more oil. Global oil supply is expected to rise, putting further pressure on an already weak market, though a number of analysts doubt that Iranian oil could cause a significant impact in the short term.