It all seemed set for the Federal Reserve to hike lending rates before the end of this year after the U.S. Labor Department reported upbeat jobs data for July. But those hopes are now fading, yet again it seems, after the same department said on Tuesday that productivity of U.S. workers declined 0.5% in the second-quarter. Gold and SPDR Gold Trust (ETF) (NYSEARCA:GLD) are gaining on the report.

The report has dubious accuracy, as former Fed Chairman Alan Greenspan once admitted in his autobiography that the same index failed to take into account the impact of the personal computer on productivity in the mid 90’s during his tenure. Admittedly then, this may just be a manufactured excuse for the Fed not to raise rates once again.

Nonetheless, the downbeat productivity report can be seen sending investors back to safe-haven assets such as gold. The price of the yellow metal rose in Asian trading, with those gains extending in European trading.

Prices of gold futures for December delivery had already hit a session peak of $1,361.35 a troy ounce in early trading in Europe. Early in the day in Asia gold rose 0.52%.

Gold started rising a day earlier as soon as the disappointing report on U .S. productivity metric reached the market.

Productivity fells 0.5%

Though the 0.5% decline in nonfarm productivity in the second-quarter improved from a 0.6% decline registered in the first-quarter, it was not what economists expected. Analysts were looking for productivity measure to only decline 0.4%.

The weak productivity report has dented investor hope that the Fed will accelerate interest rate hikes and investors are turning to gold as a hedge as they see a prolonged period of economic uncertainty.

Before the productivity data came out, the Labor Department had reported that 255,000 new jobs were created in the U.S. in July, exceeding the estimate of 179,000 and building on the 292,000 jobs created in the prior month.

Pressure on dollar favors gold trading

The mixed U.S. economic data has also taken pressure off the dollar, which recently soared against a basket of global rivals. The U.S. dollar index was down nearly 0.54%.

But a weaker dollar is favorable for gold trader is it makes the yellow metal more affordable for foreign investors.

Gold prices rose in the first-quarter and are currently up about 26% so far in 2016. Mixed global economic data are expected to keep investors in hedging mode, thus driving up demand for gold.