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Gold Turns Positive on Tepid US Jobs Report, Poised for Flat Week

January 10, 2020 at 14:14 by Andrew Moran

Gold futures turned positive to end the trading week, driven by a December jobs report that fell short of market forecasts. The yellow metal is poised for a flat week, down by just 0.01%. With renewed risk appetite in equities, will gold prices take a breather from their recent flirtation with $1,600?

February gold futures picked up $0.10, or 0.0064%, to $1,554.40 per ounce at 12:57 GMT on Friday on the Comex division of the New York Mercantile Exchange. Gold is on track for a relatively flat week, despite topping the crucial $1,600 mark earlier in the trading week. The precious metal has had a quick jump of more than 2% to start the year.

Silver, the sister commodity to gold, is mustering up a rally to finish the trading week. March silver futures tacked on $0.07, or 0.4%, to $18.005 per ounce. The white metal is getting ready to record a weekly loss of 0.5%, and it is up 0.6% to start 2020.

According to the Bureau of Labor Statistics (BLS), the US economy added 145,000 new jobs in December, falling short of the median estimate of 164,000. In November, the labor market added a whopping 266,000 new jobs. The unemployment rate was unchanged at a 50-year low of 3.5%.

For the ninth consecutive year, the US economy has added more than two million jobs. In 2019, 2.11 million new jobs were created, down from the 2.18 million figure in the previous year.

Investors are also combing through the report to find that average hourly earnings rose 0.1% to a 12-month rate of 2.95%, average weekly hours dipped to 34.3 hours, and the labor force participation rate was unchanged at 63.2%.

A bulk of the new jobs created were led by retailers (41,000), hotels and restaurants (40,000), healthcare (28,000), and construction (20,000). Government payrolls swelled 12,000 and manufacturing jobs declined 6,000.

Precious metals were capped by a rising US dollar as the greenback edged up 0.02% to 97.47. The dollar will record a weekly gain of 0.65%. A stronger buck is bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

Financial markets have been more bullish since President Donald Trump announced that Iran would be “standing down” following the two nations’ recent conflict. Washington will slap economic sanctions on Tehran, but it may be more severe after it was reported that Iran may have been responsible for the Ukrainian plane crash that resulted in the deaths of more than 170 people, including 63 Canadians.

In other metal markets, March copper futures were flat at $2.80 per pound. March platinum futures added $5.90, or 0.61%, to $977.90 an ounce. March palladium futures surged $17.30, or 0.84%, to $2,077.70 per ounce.

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