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Gold Dips as US Jobless Rate Tips Below 4%

May 4, 2018 at 16:32 by Andrew Moran

Gold futures are trading in the red at the end of the trading week as the US economy added fewer-than-expected jobs and the unemployment rate fell below 4% for the first time in nearly 20 years.

June gold futures slipped $0.90, or 0.07%, to $1,311.80 per ounce at 16:06 GMT on Friday. The yellow metal is on track for a weekly decline of 1%, its first weekly loss in nearly a month. Year-to-date, gold prices are in the red, down 0.23%.

Silver, the sister commodity to gold, is trying to muster up a rally to finish the trading week. July silver futures rose $0.023, or 0.14%, to $16.47 an ounce. The white metal is also poised for a weekly loss of 0.5%. Year-to-date, silver prices have tumbled 4%.

According to the Bureau of Economic Analysis (BEA), the US economy added 164,000 jobs in April and the jobless rate decreased under 4% for the first time since 2000. Inflation was tame as average hourly wages climbed only four cents, or 0.1%, to $26.84 – the annual rate of pay was unchanged at 2.6% for the third consecutive month.

This helped the US dollar as the greenback jumped 0.24% to 92.66, propelling the buck to a weekly gain of 1.22%. A strengthening currency is bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

The latest jobs report and the surging greenback could give the Federal Reserve enough ammunition to raise interest rates at next month’s Federal Open Market Committee (FOMC) policy meeting. According to the CME Group FedWatch tool, there is a 100% chance of a June rate hike.

Investors will comb through the remarks delivered by New York Fed President William Dudley and San Francisco Fed President John Williams on Friday.

Other metal commodities were mixed at the final trading session of the week. July copper futures were flat at $3.08 per pound. July platinum futures were flat at $904.90 an ounce. July palladium futures slipped $2.85, or 0.30%, to $955.85 an ounce.

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