Gold Little Changed By April Jobs Report

Gold Little Changed By April Jobs Report

Gold little changed by the release of the key April jobs report, which investors were watching closely for indications on the state of the economy and the labor market.

The yellow metal shrugged off the generally positive news from the U.S. jobs front which showed nonfarm payrolls growing by 428,000 in April, just above the Dow Jones estimate of 400,000, however the unemployment rate didn’t drop as expected, standing firm at 3.6%. Leisure and hospitality led job gains followed by manufacturing and transportation and warehousing.

A near 20-year high in the dollar continues to pressure gold prices, as did Wednesday’s highly anticipated half-point interest rate hike from the Federal Reserve, the most in 22 years.

The dollar has become most investors’ haven of choice, but gold also has some support from risk-off investors after Thursday’s rout in equities, the ongoing war between Russia and Ukraine, and coronavirus lockdowns in places like China.

Front-month gold futures rose 0.4% Thursday to settle at $1,875.70 an ounce on Comex, though the June contract dropped 1.9% in the first four days of the week. Gold decreased 2.2% in April, its worst month since September. It retreated 3.5% in 2021. The July contract is currently up $2.00 (-0.11%) an ounce to $1,877.70 and the DG spot price is $1,879.70.

Payrolls processing firm ADP reported Wednesday that private payrolls increased by just 247,000 jobs last month, well below analysts’ consensus estimate for 390,000. It was also a decline from March’s upwardly revised increase of 479,000.

Meanwhile, weekly initial jobless claims rose by 19,000 last week to 200,000, a two-month high, according to a report Thursday from the Labor Department. A separate report showed that worker productivity plummeted at its sharpest pace in more than 74 years in the first quarter.

The Fed’s rate hike Wednesday was the second this year — and one of many more anticipated — as the central bank strives to rein in 40-year highs in inflation. The vast majority of investors expect the Fed to raise interest rates to a range of 1.5% to 1.75% at policymakers’ next scheduled meeting in June from the current 0.75% to 1%, according to the CME’s FedWatch Tool.

Front-month silver futures rose 0.2% Thursday to settle at $22.44 an ounce on Comex, as the July futures contract retreated 2.8% in the first four days of the week. Silver lost 8.2% in April, its worst monthly performance since September. It fell 12% in 2021. Silver prices are tied to industrial demand. The July contract is slightly down currently by $0.038 (-0.17%) an ounce to $22.405 and the DG spot price is $22.45.

Spot palladium decreased 2.6% Thursday to $2,223.50 an ounce, and it’s down 5.4% so far this week. Palladium touched a record $3,440.76 in March. Russia produces about 40% of the world’s palladium, and Russia’s Nornickel is the world’s largest supplier of palladium. The metal advanced 2.6% in April after declining 8.5% in March. It retreated 22% in 2021. This morning finds palladium under pressure with the current DG spot price down $10.5.40 an ounce to $2,117.20.

Spot platinum slipped 0.2% Thursday to $991.60 an ounce but is up 3.5% for the week. The metal retreated 4.4% last month after dropping 4.2% in March. It lost 9.4% last year. Currently, the DG spot price is down $21.00 an ounce to $970.40.


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