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Market Reaction to NFP: Gold Drops, Crude Oil Rallies

February 6, 2015 at 17:54 by Vladimir Vyun

Ahead of the current trading session, market participants were eyeing US nonfarm payrolls, anticipating a robust growth of employment. The report did not fail to deliver, beating even optimistic expectations. Together with accelerating wage growth and the increase of the participation rate, the data looked very positive, improving the market sentiment.

The commodity market, unlike during the previous trading session, reacted to the news in a predictable manner as crude oil rallied while gold dropped. Optimism about the US economy results in hopes for higher fuel consumption, hence the rally of oil prices. Consequently, gold dropped as investors felt less inclined to buy the precious metal as a safe haven asset. Additionally, the positive data increased odds for an interest rate hike from the Federal Reserve in June. Such talks bolstered the US dollar, driving bullion even further down.

Gold futures for delivery in April slid 2.41 percent to $1,232.30 per troy ounce as of 17:32 GMT on COMEX today. Meanwhile, contract for delivery of WTI crude oil in March rallied 2.44 percent to $51.71 per barrel on NYMEX, and Brent crude gained 2.58 percent to $58.03 per barrel on ICE.

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

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