Weekly Round-Up: Gold Price Falls on Release of US Jobs Data

The gold price remained flat ahead of Friday’s (February 2) US jobs data report, but its release sent gold into negative territory for the first time this year.

As of 8:54 a.m. EST on Friday, gold was trading at $1,335.30 per ounce after the Bureau of Labor Statistics reported that 200,000 jobs were created in January. The initial estimate for job gains was set at 181,000.

Prior to the price drop, Chris Gaffney, president of world markets at Florida-based EverBank, told Reuters, “[s]tronger-than-expected jobs data, lower unemployment and higher wages would signal strength in the economy, and could in turn strengthen the dollar and pressure gold.”

While inflation worries generally boost gold due to its safe-haven status, expectations that the US Federal Reserve will raise interest rates to fight inflation is currently making gold less attractive because it does not pay interest.

Silver experienced the same fate as gold, slipping from $17.20 per ounce on Thursday (February 1) to $16.91 as of 9:15 a.m. EST on Friday. Silver’s decrease can also be attributed to the better-than-expected US jobs data released Friday morning.

Analysts believe that there is still hope that the grey metal will see $20 an ounce in 2018. That increase would bring it back to levels seen in 2016.

Rounding out the week in metals is copper, which saw another week of decreases, slipping 0.1 percent. As of 9:39 a.m. EST on Friday, copper was trading at $3.21 per pound. On a positive note, copper did manage to make a 1-percent increase on Wednesday (January 31).

Meanwhile, oil was down this week, and was sitting at $64.88 per barrel as of 10:02 a.m. EST on Friday. While oil has inched away from the $70 level it had been steadily progressing towards, Goldman Sachs (NYSE:GS) believes that prices will hit $82.50 by the summer.

The bank thinks that a rebalancing of the long-oversupplied oil market has already occurred, about six months sooner than it expected. Additionally, Goldman credits stellar oil demand growth and OPEC’s deal to limit output as factors in its outlook, and says that many of those trends will continue.

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