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Gold Trading at Six-Week High on Weak Jobs Report Fallout

June 5, 2017 at 16:50 by Andrew Moran

Gold prices are trading at their highest levels since the end of April as the fallout from last week’s weaker-than-expected jobs report continues. Investors will now look to a few key events later this week, including the UK election and the European Central Bank (ECB) policy meeting.

August gold futures rose $1.60, or 0.13%, to $1,281.80 per ounce at 16:30 GMT on Monday. Gold prices are poised to settle at the highest point since April 21. The yellow metal, which advanced more than 1% last week, is set for back-to-back gains.

Silver, the sister commodity to gold, is also posting modest gains on the first trading day of the week. July silver futures climbed $0.03, or 0.20%, to $17.56 an ounce. Silver recorded a weekly gain of 1.1% last week.

The precious metal is still trading higher from last week’s disappointing US jobs report. In May, the US economy added just 138,000 jobs, much lower than the projected 185,000 jobs. Although the unemployment rate dipped to a 16-year low of 4.3%, this was because more Americans left the labor force than people who found new jobs.

Any gains found in gold were capped from a higher US dollar as the greenback jumped 0.08%. A stronger US dollar is bad for commodities like gold and silver because it makes more expensive for foreign investors to purchase.

Investors are looking ahead to several key events later this week.

The ECB will be holding a policy meeting on Thursday, when ECB head Mario Draghi will provide further guidance on monetary easing. The UK will be holding national elections on Thursday, and many polls suggest a tight race between Prime Minister Theresa May and the Jeremy Corbyn-led Labor Party. Former FBI director James Comey is scheduled to testify in front of the Senate intelligence committee on Thursday pertaining to Russia. Outlets are also reporting that President Donald Trump and his administration will announce a $1 trillion infrastructure spending initiative soon.

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