Some market watchers believe that Friday’s US jobs data may strengthen the case for the Fed to make an interest rate hike this month.
The gold price fared well at the beginning of the week, hitting a high of $1,146 per ounce on Tuesday. However, it declined fairly steadily after that, and in particular took a hit on Friday’s US jobs data. It was at $1,121.25 as of 1:55 p.m. EST.
According to The Wall Street Journal, the report from the US Department of Labor shows that US employment growth slowed in August; however, the unemployment rate came in at 5.1 percent, down from July’s 5.3 percent. The news outlet states that the unemployment rate “is now lower than at any point since 2008 and right in the middle of the Fed’s long-run projections.”
While that’s good news for the US economy, it may be bad for gold market participants. Those involved in the space have spent 2015 apprehensively waiting for the US Federal Reserve’s anticipated interest rate hike, and the Journal states that the fall in unemployment “strengthens the case for an interest rate increase at the Fed’s Sept. 16-17 meeting.”
If the central bank does raise the rate, gold and other precious metals, which investors tend to turn to when interest rates are low, could be negatively impacted.
For its part, silver had a fairly steady week, though like gold it took a bit of a fall following the release of US jobs data. It was trading hands at $14.60 per ounce as of 1:55 p.m. EST on Friday.
On the base metals side, COMEX copper for December delivery rose 2.4 percent on Wednesday to settle at $2.3845 per pound, as per another Wall Street Journal article. That’s its highest settlement since August 10. However, the price rise comes with something of a disclaimer — the news outlet notes that it came as “a national holiday in China put a pause on negative news.”
Finally, Brent crude for October delivery was sitting at $49.92 per barrel as of 1:55 p.m. EST on Friday, while US crude was at $46.23. Losses for both were limited due to a Baker Hughes (NYSE:BHI) report that US energy firms cut 13 oil rigs for the first time in seven weeks, as per Reuters. In total that leaves 662 rigs out, the lowest level since mid-July.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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