Commodity Blog

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


Gold to Settle Lower for the Week As Equities Rebound

February 7, 2020 at 17:43 by Andrew Moran

Gold futures are picking up some gains to close out the trading week, but they will record a weekly loss. The yellow metal took a hit as investors’ risk appetite ballooned since the 600-point rout a week ago amid confidence in the Wuhan coronavirus waning, upbeat US economic data, and bullish quarterly corporate earnings. But analysts may get a better understanding of how the global economy is handling the outbreak in the rest of the first quarter.

April gold futures edged up $1.00, or 0.1%, to $1,571.30 per ounce at 16:17 GMT on Friday on the Comex division of the New York Mercantile Exchange. Gold will post a weekly drop of 1.4%, but it is still up more than 3% so far this year. Over the last 12 months, the yellow metal has surged nearly 20%.

Silver, the sister commodity to gold, is plummeting to finish the trading week. March silver futures slumped $0.165, or 0.92%, to $17.655 an ounce. The white metal will also report a weekly slide of more than 2%, erasing its gains year-to-date and bringing it into negative territory by 1.4%.

Precious metals are taking a hit on a bullish January jobs report that lifted the US Dollar Index 0.19% to 98.69. A strong buck is bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

Last month, the US economy added 225,000 new jobs, up from an upwardly revised 147,000 in December. The market had expected a gain of just 160,000. The jobless rate rose 0.1% to 3.6% because more people entered the workforce. Average hourly earnings jumped 0.2% to $28.44, while the labor force participation rate increased 0.2% to 63.4%.

The biggest gains were found in education and health care (72,000), construction (44,000), leisure and hospitality (36,000), transportation and warehousing (28,300), and professional and business services (21,000). The losses were situated in manufacturing (12,000), retail (8,300), utilities (1,400), and finance (1,000).

Overall, the employment gains for 2019 were revised downward from 2.11 million to 2.09 million. In 2018, the boost in new jobs was cut from 2.68 million to 2.31 million.

Financial markets suffered modest losses on Friday as investors are concerned that the coronavirus will significantly slow down the Chinese economy. The death toll climbed to 636 and the number of confirmed cases swelled to 31,000, but authorities in Beijing say that new cases are slowing. The reassurance was not enough to calm US markets.

In other metal markets, March copper futures shed $0.035, or 1.35%, to $2.5585 per pound. March platinum futures tacked on $0.60, or 0.06%, to $968.00 an ounce. March palladium futures tumbled $26.60, or 1.19%, to $2,210.61 per ounce.

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

Leave a Reply