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Gold Poised for Worst Week in a Month Amid Stellar April US Jobs

May 3, 2019 at 13:26 by Andrew Moran

Gold futures are rallying at the end of the trading week, but they are on track for their worst week in more than a month. The yellow metal has been tumbling as of late, but gold prices are rebounding and contradicting conventional opinion. Despite a stellar jobs report, a rising US dollar, and a central bank dismissing suggestions that it would slash interest rates, gold is bullish on Friday.

June gold futures tacked on $3.30, or 0.26%, to $1,275.60 per ounce at 12:53 GMT on Friday. Gold is poised for a weekly decline of about 1.2%, bringing its year-to-date loss to just under 2%. Gold will have its worst week since the end of March.

July silver futures are rallying to close the trading week. July silver futures added $0.11, or 0.73%, to $14.73 an ounce. Silver prices will also record a steep weekly plunge of around 3%. The white metal is down around 7% so far on the year.

According to the Bureau of Labor Statistics (BLS), the US economy created 263,000 new jobs in April, beating the median estimate of 217,000. The unemployment rate fell to a 49-year low of 3.6%. The average hourly wage climbed six cents, or 0.2%, to $27.77 per hour; and the 12-month rate was still up 3.2%. The number of hours worked each week dipped 0.1-hour last month to 34.4 hours.

The federal government also revised its jobs numbers from February and March. The BLS increased February’s gain from 33,000 to 56,000 and decreased March’s jump from 196,000 to 189,000.

The US dollar soared on the news as the greenback surged 0.22% to 98.04. The dollar is on track for a weekly boost of about 0.1%, advancing its YTD rise to 2%. A stronger buck is bad for commodities denominated in dollars because it makes it more expensive for foreign investors to purchase.

Meanwhile, precious metals are taking a hit on the Federal Reserve dismissing reports that it is considering cutting interest rates. The White House has been pressing the Eccles Building to cut rates by as much as a full percentage point. Since gold is generally sensitive to a rising-rate environment because it raises the opportunity cost, a rate cut would be a boon for the precious metal.

There are further reports that the world’s two largest economies are close to reaching a trade agreement. The US and China are nearing a resolution to a year-long trade war, a move that would boost investors’ appetites for riskier assets and shun safe-haven assets.

In other metal markets, July copper futures rose $0.01, or 0.47%, to $2.7925 per pound. July platinum futures edged up $1.60, or 0.19%, to $855.80 an ounce. July palladium futures jumped $6.00, or 0.45%, to $1,349.20 per ounce.

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

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