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Gold Slides As Markets Brush Off Historic April Jobs Report

May 8, 2020 at 17:08 by Andrew Moran

Gold futures are sliding to end the trading week as financial markets shrugged off the historic April jobs report. The yellow metal’s drop was capped by a weaker US dollar, helping prices squeak out a tepid weekly gain. With bullish optimism prevalent throughout the equities arena, will gold continually trade around $1,700, or will it test $1,800 this month?

June gold futures tumbled $9.70, or 0.56%, to $1,716.10 per ounce at 16:47 GMT on Friday on the Comex division of the New York Mercantile Exchange. Gold is poised for a weekly jump of about 0.4%, bringing its year-to-date surge to 13%.

Silver, the sister commodity to gold, is rallying to finish the trading week. July silver futures tacked on $0.185, or 1.19%, to $15.775 per ounce. The white metal will post a huge weekly increase of 4.7%, paring its YTD loss to below 12%.

Despite the US economy shedding more than 20 million jobs last month, investors shrugged and sparked considerable gains in the leading stock indexes. On Friday, the Bureau of Labor Statistics (BLS) reported that 20.5 million jobs were lost in April, raising the unemployment rate to 14.7%. Economists had forecast 22 million lost positions and a 16% jobless rate. The last two jobs reports were revised downward: March total non-farm payroll employment was down by 169,000 to -870,000, and it modified its February numbers down by 45,000 to +230,000.

Many analysts are stumped at the devastating economic news not pushing gold prices higher and not crashing stock markets. There is sort of an inverse trend: gold is barely budging on bad news, while stocks are soaring on bad news.

The next major development traders will keep an eye on is a potential renewed US-China trade spat. Reports suggest trade representatives held a discussion to bolster conditions for the phase-one trade agreement, but Chinese state-run media claims President Donald Trump threatened to “terminate” the pact. It has been reported over the last week that the White House is considering options to punish Beijing for its mishandling of the coronavirus, including new tariffs and not paying its debt.

A slumping greenback helped cap gold’s decline. The US Dollar Index, which measures the buck against a basket of currencies, fell 0.19% to 99.70, from an opening of 99.84. A lower greenback is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase. The index will record a weekly jump of 0.6%.

In other metal markets, June copper futures advanced $0.0285, or 1.2%, to $2.4095 per pound. June platinum futures picked up $8.20, or 1.05%, to $790.30 an ounce. June palladium futures plunged $23.60, or 1.29%, to $1,812.20 per ounce.

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