Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Gold Flat on Strong October Jobs Report, Weak Manufacturing

November 1, 2019 at 17:12 by Andrew Moran

Gold futures are trading relatively flat at the end of the trading week, driven by mixed data: a strong October jobs report but weak US manufacturing. Gold’s seesaw was common in recent sessions because investors were sour on news that Chinese officials are cautious about the US-China trade deal, the Federal Reserve cut interest rates but signals a pause, and the gross domestic product was better than expected. It has been a mixed week for the yellow metal.

December gold futures slipped $1.40, or 0.09%, to $1,513.50 per ounce at 17:02 GMT on Friday on the Comex division of the New York Mercantile Exchange. Gold prices are on track for a tepid weekly boost of 0.4%, raising their year-to-date gains to just under 18%.

Silver, the sister commodity to gold, is trying to muster up a rally to close out the trading week. December silver futures added $0.02, or 1.1%, to $18.09 an ounce. The white metal is poised for a slight gain of 0.3%. So far this year, silver is up more than 16%.

On Friday, the Bureau of Labor Statistics (BLS) reported that the US economy added 128,000 new jobs in October, beating the market consensus of just 89,000 jobs. The unemployment rate edged up 0.1% to 3.6%. Also, the September job gains were revised upward to 180,000.

The 12-month wage growth rate climbed to 3% thanks to an increase of 0.2%, or six cents, in average hourly earnings to $28.18.

While this surprised markets and helped the Dow Jones surge 250 points, domestic manufacturing put pressure on the world’s largest economy. The manufacturing sector shed 36,000 jobs last month and the Institute for Supply Management (ISM) manufacturing index clocked in at 48.3, up from 47.8 in September. Anything below 50 indicates a contraction.

Earlier this week, the GDP came in at 1.9% in the third quarter, down from the 2.0% gain in the second quarter. Analysts had penciled in 1.6%, so this suggests that the economy is not cooling down as fast as many anticipate.

Although the White House has been adamant that Beijing and Washington are on the cusp of signing the first phase of a trade agreement, new reports suggest that Chinese officials are doubtful over the long-term prospects of a comprehensive trade agreement. This news put a cap on equities.

Meanwhile, the Fed cut rates on Wednesday by a quarter-point, lowering the target rate to 1.50% to 1.75%. But Fed Chair Jerome Powell and the Federal Open Market Committee (FOMC) indicated that the mid-cycle adjustments would be put on ice unless there is a major economic event.

The US Dollar Index tumbled 0.16% to 97.20, paring its earlier gains. The greenback is on track for a weekly loss of 0.65%. A lower buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

In other metal markets, December copper futures tacked on $0.015, or 0.59%, to $2.65 per pound. December platinum futures surged $23.00, or 2.46%, to $956.70 an ounce. December palladium futures skyrocketed $29.50, or 1.68%, to $1,784.90 an ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply