Gold lifted by this morning’s jobs data that shows much weaker than expected growth. The yellow metal was little changed overnight as investors awaited direction from upcoming jobs reports, which are expected to provide a clearer picture of the state of the labor market as the delta variant surges.
Only 330,000 jobs were added by private companies in July, per ADP, far shy of the 653,000 estimate that was forecast by market experts. This is a huge deceleration from June’s 680,000 new positions and the lowest total added since February. Leisure and hospitality saw the biggest gains with 139,000 jobs, while goods-producing industries contributed just 12,000 jobs.
The next data to look for is the Labor Department’s weekly initial jobless claims report that comes out tomorrow and the government’s monthly nonfarm payrolls report for July, scheduled for release Friday.
December gold futures fell 0.4% Tuesday to settle at $1,814.10 an ounce on Comex. The front-month contract slid 0.2% in the first two days of the week. The precious metal increased 2.6% in July and advanced for the third time in four months. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 4.3% so far in 2021. The December contract is currently up $20.870 (+1.14%) to $1,831.30 and the DG spot price is $1.832.50.
Holdings in SPDR Gold Trust, the world’s largest gold backed exchange-traded fund, fell 0.2% Tuesday to 1,027.97 metric tons, Reuters reported.
The economic statistics and the state of the pandemic are likely to influence investors’ forecasts on when the Federal Reserve and other central banks around the world are likely to begin tapering their stimulus efforts.
U.S. manufacturing growth cooled last month, the key survey from the Institute for Supply Management showed on Monday. The ISM index of national factory activity fell to 59.5 last month, the lowest reading since January, from 60.6 in June. It was expected to tick up to 60.8%, based on the median forecast of economists polled ahead of the report. Figures above 50 index expansion, which accounts for almost 12% of the U.S. economy.
The Fed signaled last week that it was likely to maintain its easy monetary policy in the near term, though Chairman Jerome Powell said officials are getting closer to being able to reduce stimulus measures. The Bank of England is scheduled to announce a policy decision later this week. Easy monetary policy is considered bullish for gold because the metal is a traditional hedge against the inflation that may follow.
Meanwhile, gold got some support from continued uncertainty about the delta variant and signals that the pandemic has yet to run its course.
September silver futures rose 0.7 cent Tuesday to settle at $25.58 an ounce on Comex. The front-month contract is up 0.1% in the first two days of the week after dropping 2.5% in July. The metal rose 47% in 2020 and is down 3.1% so far this year. Silver prices are tied to industrial demand, which could taper if lockdowns are reinstated and dampen manufacturing. The September contract is up $0.443 (+1.73%) an ounce to $26.025 and the DG spot price is $25.90.
Spot palladium fell 1.4% Tuesday to $2,658.50 an ounce and is down 0.6% so far this week. It fell 4.3% in July and is up 8.5% so far in 2021. Currently, the DG spot price is down $29.70 an ounce to $2,687.00
Spot platinum lost 0.9% Tuesday to $1,056.70 an ounce and retreated 0.1% in the first two days of the week. The autocatalyst decreased 2.1% in July and is down 1.6% in 2021. The DG spot price is currently up $2.30 an ounce to $1,060.10.
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