Weekly Round-Up: Gold Price Climbs on US Jobs Report

The gold price was set to touch a six-week high on Friday after a disappointing US jobs report.

gold price silver copper oil

The gold price was on track to hit a six-week high on Friday (June 2) after a weaker-than-expected US nonfarm payrolls report eased expectations of more aggressive interest rate hikes this year.

The data shows that US job growth slowed last month even though the unemployment rate dropped to its lowest level in 16 years. The US Federal Reserve is now expected to continue to increase interest rates at a gradual pace.

“A hike in June is still on the table but the news flow will have to improve for the Fed to keep tightening in the second part of the year,” Thomas Julien, US economist at Natixis North America, told Reuters.

The weak jobs data also put pressure on the US dollar, which touched a seven-month low on Friday. “This is not the kind of report people had hoped for, and that has put pressure on the dollar and yields, and gold is always happy to profit from that,” said Georgette Boele of ABN AMRO.

As of 1:00 p.m. EST on Friday, the gold price was at $1,276.72 per ounce.

Looking over to silver, the white metal rose sharply on Friday following the release of the jobs report. Prices were also supported by a weaker US dollar. According to Metals Focus, the first five months of 2017 have brought a lack of clear direction in silver prices.

“Since then, however, silver has had to contend with the competing forces of, on the one hand, rising US interest rates and a healthy domestic economy and, on the other, concerns about the US administration’s ability to fulfil its economic promises and global geopolitical concerns,” the firm said.

As of 1:00 p.m. EST on Friday, the white metal was at $17.52 per ounce. Meanwhile, platinum was up 1 percent for the week, at $937 per ounce, and palladium gained 1.4 percent to reach $834.97 per ounce.

On the base metals side, three-month LME copper finished Friday 0.6 percent weaker, at $5,665 per tonne. “The market is stalling into a downtrend channel from February’s $6,204 high,” Alastair Munro of Marex Spectron said in a note. A break below $5,602 would open up the potential for a move to $5,500.

Lastly, spot oil fell on Friday, and was trading at its lowest level in three weeks due to rising US production and US President Donald Trump’s withdrawal from the Paris Climate Accord. July West Texas Intermediate crude on the NYMEX slid 84 cents, or 1.7 percent, to $47.52 a barrel, while August Brent crude lost 90 cents, or 1.8 percent, to fall to $49.73.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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This article is updated each week. Please scroll the top for the most recent information.

By Priscila Barrera, May 26, 2017

The gold price was on track to hit a four-week high on Friday (May 26) as political uncertainty about the Group of Seven summit in Italy turned investors toward safe-haven assets.

“We have had the political noise coming from Trump and the U.S. administration and there is a certain element of uncertainty in the markets in general, which is supporting gold. Equities are also down,” analyst Carsten Menke at Julius Baer in Zurich told Reuters.

Investors are closely watching the G7 meeting, where leaders from the world’s richest nations are facing difficult talks with US Donald President Trump. The upcoming UK election is also pushing investors away from riskier assets and has boosted gold’s appeal.

“At the moment it’s increasing political uncertainty that is driving the gains rather than [Federal Reserve] speculation,” Colin Cieszynski, chief market strategist at CMC Markets, said to MarketWatch.

“Between [Thursday’s] contentious NATO summit and the potential for fireworks at this weekend’s G-7 Summit, plus a tightening U.K. election race, capital has been moving back in to defensive havens like gold,” he added.

Looking ahead to next week, the focus is likely to turn back to speculation about the US Federal Reserve and interest rates. That’s because US ADP payrolls are due Thursday and nonfarm payrolls are out Friday, Cieszynski said.

As of 1:00 p.m. EST on Friday, the gold price was sitting at $1,267.26 per ounce.

Looking over to silver, the white metal was on track for a weekly gain of almost 2.5 percent on Friday, supported by the same political uncertainty as gold. As of 1:00 p.m. EST that day it was trading at $17.31 per ounce.

Platinum was up 2.8 percent for the week, at $961.24 per ounce, having achieved its biggest weekly rise since the beginning of the year. Meanwhile, palladium gained 1.8 percent to reach $779 per ounce, its first weekly gain this month.

On the base metals side, copper pulled back from the three-week high it hit on Thursday (May 25) ahead of the long weekend break. London Metal Exchange copper closed at $5,657.50 a tonne, down 1.1 percent. Prices hit their highest since May 3 on Thursday at $5,768.50.

Lastly, spot oil rebounded on Friday (May 26), after losing almost 5 percent following OPEC’s nine-month extension agreement to curb production to boost prices. The deal disappointed investors who were expecting deeper or longer output cuts.

On Friday, June West Texas Intermediate crude rose 18 cents, or 0.4 percent, to $49.08 a barrel. July Brent crude on London’s ICE Futures exchange was down 2 cents, or less than 0.1 percent, at $51.44.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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