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The US dollar advanced July 5 following a positive report on the nation’s job market.
The US dollar advanced July 5 following a positive report on the nation’s job market. The Department of Labor announced that the United States gained 195,000 new jobs in June. Such strong and unexpected results reinforced beliefs that the Federal Reserve will end quantitative easing sooner rather than later.
As the US currency rises, however, dollar-denominated commodities are suffering from increased selling pressure, Marketwatch reported. For example, gold dropped $15, to $1,236.60, on July 5. Earlier in the week, the price of the precious metal was already sliding as the market anticipated a positive US jobs report.
Gold has been on a downward slope ever since Federal Reserve Chairman Ben Bernanke announced that the central bank plans to pull back its bond buying. The precious metal closed the second quarter on June 28 with its steepest quarterly loss since modern trading began.
“It looks like the market is increasingly expecting positive jobs data, which would be dollar positive and gold negative,” Ross Norman, CEO of gold dealer Sharps Pixley, told Marketwatch.
In addition to gold, silver and copper were also negatively affected by dollar’s gain this week. Silver dropped $0.64, to $19.05 an ounce, July 5, continuing its descent from previous weeks. Earlier last week, copper futures rose due to low inventory, but they fell $0.08, to $3.10 a pound, on July 5.
Finally, crude oil prices were boosted this week by market concerns over unrest in Egypt. Brent crude rose $0.75, to $106.29 per barrel, at the end of the week, according to Reuters. That was the commodity’s largest weekly gain since June 2012.
Earlier in the week, Brent crude reached a high of $107.34 per barrel immediately following an announcement from the Egyptian army that troops are on high alert due to an attack on the Sinai Peninsula.