Gold fighting back above $1,700 after slipping on strong jobs data this morning. The yellow metal dropped under $1,700 an ounce on Thursday, pressured by increasing U.S. Treasury yields and a stronger dollar. The bond market boosted yesterday after the U.S. Federal Reserve Chairman Jerome Powell indicated that the central bank probably wouldn’t intervene to curb yields.
Nonfarm payrolls jumped by 379,000 for February according to the Labor Department, overwhelmingly beating the expected gain of 210,000 new jobs. The unemployment rate fell to 6.2%, basically holding steady from the 6.3% rate in January. Gold dropped 1% on the news, while futures on the Dow Jones Industrial Average rose 215 points, or 0.7% and the U.S. 10-year Treasury yield popped above 1.6%.
Powell said Thursday that the gain in yields was “notable” but that he didn’t think the Fed would have to act to bring them down. Treasury yields, gold and the dollar are all traditional hedges against inflation. Yields and the U.S. currency have climbed ahead of an expected new stimulus measure, but their strength has been bearish for gold because they also increase the opportunity cost of holding bullion.
Investors awaited further direction Friday from the release of the key U.S. employment figures for February, which are closely watched as a barometer of the labor market and the economy.
April gold futures fell 0.9% Thursday to settle at $1,700.70 an ounce on Comex. The yellow metal dropped 1.6% in the first four days of the week after its worst month since 2016 in February. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. The April contract is up over $1 an ounce to $1,702.40 and the DG spot price is $1,703.30.
The U.S. Senate opened debate Thursday on its version of President Joe Biden’s $1.9 trillion pandemic relief bill and is likely to vote on the measure this weekend, though not a single Republican senator voted to open debate. A version of the bill passed the House of Representatives last weekend. The bill is designed as a shot in the arm to an economy still reeling from the pandemic.
U.S. weekly initial jobless claims came in slightly better than expected for last week, according to Labor Department data released Thursday. But the figures were worse than the worst week of the Great Recession for the 50th week in a row.
The COVID-19 virus has killed almost 2.57 million people worldwide and sickened almost 115.6 million. About 25% of the cases — and 20% of the deaths — are in the U.S. The country has about 28.8 million cases, more than any other nation.
May silver futures decreased 3.5% Thursday to settle at $25.46 an ounce on Comex. They’re down 3.7% so far this week. The metal decreased 1.8% in February, its first retreat in three months. Silver gained 1.9% in January and 47% in 2020. The May contract is down by $0.10 an ounce to $23.350, while the DG spot price is $25.41.
Spot platinum retreated 4.1% Thursday to $1,139.70 an ounce. It’s down 4.6% so far this week after tumbling 6.6% last week. The metal rallied 11% in February amid forecasts for higher demand and tighter supplies. The autocatalyst metal advanced 0.5% in January and 11% in 2020. The DG spot price is currently off by $7 an oune to $1,133.80.
Spot palladium fell 0.9% Thursday to $2,364.00 an ounce. It’s up 1.1% so far this week. It gained 4.9% in February after plummeting 9% in January and rallying 26% in 2020. The DG spot price is up $4 an ounce to $2,372.50, currently.
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