Weekly Round-Up: Gold Price Falls After Positive US Jobs Report

The gold price fell on Friday (August 4), after hitting a seven-week high earlier this week. A new report showed better-than-expected US employment data, boosting the US dollar and raising fears of another Fed rate increase later in 2017.
“The strong rise in non-farm payrolls together with the drop back in the unemployment rate to a joint 16-year low suggests the Fed will still need to raise rates again later this year, even if inflation remains subdued,” said Simona Gambarini, commodities economist at Capital Economics.
Another interest rate increase this year could impact gold, which tends to fare better when interest rates are low and often struggles when interest rates increase. That’s because higher rates curb the investment appeal of non-interest-bearing assets like gold.

“Today’s report has probably done very little to alter the Fed’s position on interest rates this year,” Craig Erlam, senior analyst at Oanda, told MarketWatch. Futures markets have priced in just below 50-50 odds for another rate hike in 2017.
The employment report also boosted the US dollar, hurting gold demand, as a stronger greenback makes commodities priced in dollars more expensive for buyers using weaker currencies.
As of 12:30 p.m. EST on Friday, the gold price was $1,257.77 per ounce. Click here to read more about the gold price performance in Q2 and what’s ahead for the yellow metal.
Looking over to silver, the white metal edged lower on Friday, and was on track to hit a weekly loss. As of 12:30 p.m. EST on Friday, the white metal was $16.31 per ounce. Click here to read more about the silver price performance in Q2.
Palladium was down 0.1 percent on Friday, trading at $882.80 per ounce, while platinum rose 0.6 percent to $966.60 per ounce.
On the base metals side, copper prices hit a fresh two-year high earlier this week, fueled by forecasts of strong demand in top copper consumer China and a weak dollar. On Friday, LME copper was trading at $6,363.50 a tonne.
Lastly, spot oil surged above $49 a barrel on Friday, supported by strong US economic data. But prices were on track for a weekly loss, as US producers continue to increase output despite low prices.
September West Texas Intermediate crude gained 18 cents, or 0.3 percent, to $49.20 a barrel on the New York Mercantile Exchange, while Brent crude for October on London’s ICE Futures exchange rose 13 cents, or 0.3 percent, to $52.16 a barrel.
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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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Weekly Round-Up: Gold Price Hits Six-week High on US Data
by Priscila Barrera, July 28, 2017.
The gold price climbed on Friday (July 28), and was on track for its third weekly gain. A new US GDP report showed weaker-than-expected inflation, easing fears that the Federal Reserve will raise rates again later this year.
“[The US GDP report] showed a big fall in annual inflation rates across the board … so there is no urgency for the Fed to raise interest rates,” Commerzbank (OTCMKTS:CRZBY) analyst Carsten Fritsch told Reuters.
A gradual rate increase would be good news for gold, which tends to fare better when interest rates are low and often struggles when interest rates increase. That’s because higher rates curb the investment appeal of non-interest-bearing assets like gold.

“Gold seems to want to rise lately, with every new data point being interpreted bullishly for gold and bearishly for the dollar,” said Brien Lundin, editor of Gold Newsletter.
The US dollar has weakened for five consecutive months, supporting the gold price. Generally a softer greenback makes commodities priced in dollars cheaper for buyers using weaker currencies.
As of 1:00 p.m. EST on Friday, the gold price was changing hands at $1,268.79 per ounce. Click here to read more about gold’s performance in Q2 and what’s ahead for the yellow metal.
Looking over to silver, the white metal edged lower on Friday, but was also on track for its third weekly gain. As of 1:00 p.m. EST, silver was at $16.70 per ounce. Click here to read more about silver’s performance in Q2.
Palladium gained 0.1 percent on Friday to trade at $873 per ounce, while platinum rose 0.9 percent to reach $930.50 per ounce.
On the base metals side, copper hit a two-year high earlier this week, fueled by a weak dollar and forecasts of strong demand in top consumer China. On Friday, LME copper was trading at $6,319 a tonne.
Lastly, spot oil surged on Friday, supported by uncertainty in Venezuela and OPEC’s renewed commitment to curb production.
September West Texas Intermediate crude lost 45 cents, or 0.9 percent, to hit $49.49 a barrel on the New York Mercantile Exchange, while Brent crude for September delivery on London’s ICE Futures Exchange rose 69 cents, or 1.3 percent, to reach $52.18 a barrel.
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.