Gold dips then regains ground to $1,800 after U.S. jobs data offers positive surprise. The yellow metal looks set for weekly gain, lifted by indications from central banks that they were in no rush to raise interest rates.
Nonfarm payrolls increased by 531,000 in October, beating the estimate of 450,000, the Labor Department reported Friday. The unemployment rate fell to 4.6%, a new pandemic low and better than expectations. Wages rose 0.4% for the month and were up 4.9% from a year ago.
On Wednesday, the Federal Reserve Chairman stated that inflation would prove “transitory,” which would not likely need a swift interest rate rise. Then Thursday, the Bank of England gave markets a surprise by announcing it would hold to its record low interest rates and continue its bond-purchasing program. These dovish moves helped gold shrug off the week’s early losses and putting the bullion on pace to end the week about 0.5% higher.
December gold futures rose 1.7% Thursday to settle at $1,793.50 an ounce on Comex, and the front-month contract is up 0.5% for the first four days of this week. Gold advanced 1.5% in October after retreating 3.4% in September. The yellow metal is down 5.4% so far in 2021. The December contract is currently up $3.10 (+0.17%) an ounce to $1,796.60 and the DG spot price is $1,801.20.
The Fed also said Wednesday that it will begin tapering its monthly bond purchases, introduced to prop up the economy during the pandemic.
In economic news, the U.S. October jobs report was the last in a series of releases on the labor market this week. The October ADP employment report Wednesday showed the U.S. added 571,000 jobs last month, primarily from hospitality hires. Meanwhile, data on U.S. initial jobless claims for last week, released Thursday, came in at a better-than-expected 269,000.
But third-quarter U.S. productivity data released Thursday showed the biggest quarterly drop since 1981 as economic growth slowed and employees worked more hours.
December silver futures increased 2.9% Thursday to settle at $23.91 an ounce on Comex. The front-month contract is down 0.2% so far this week. Silver increased 8.6% last month after dropping 8.2% in September, its fourth consecutive monthly decline. The metal is down 9.5% so far this year. Silver prices are tied to industrial demand. The December contract is currently down $0.006 (-0.03%) an ounce to $23.905 and the DG spot price is $24.03.
Spot palladium rose 0.3% Thursday to $2,017.00 an ounce and is up 0.6% so far this week. It gained 4.3% in October after declining 23% in September. It’s down 18% so far in 2021. The DG spot price is currently up $40.60 an ounce to $2,057.00
Spot platinum increased 0.5% Thursday to $1,035.00 an ounce and is up 0.6% so far this week. The metal rose 6% in October after losing 5.3% in September. It’s down 3.6% so far this year. Currently, the DG spot price is up $11.90 an ounce to $1,048.10.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.