Gold rose over $10 an ounce from an early morning trading dip as U.S. jobs number shows a big miss for June.
Private sector hiring in the U.S. took a serious downturn in June per the payrolls processing firm ADP. Private payrolls lost 33,000 jobs, missing the forecast of a 100,000 job gain. This is the first decline reported by ADP since March 2023. The May job growth figure was revised even lower to just 29,000 jobs added from 37,000.
A weak dollar kept a floor under metals prices as the greenback weakened to its lowest point in more than three years, making gold a more attractive alternate investment. But Haven demand eased as the conflict between Israel and Iran failed to escalate and after U.S. President Donald Trump announced the possibility of a ceasefire between Israel and Hamas in Gaza.
August gold futures rose 1.3% Tuesday to settle at $3,349.80 an ounce on Comex, and the front-month contract rallied 1.9% in the first two days of the week. Bullion slipped 0.2% in June after losing 0.1% in May and increasing 5.4% in April. It’s up 27% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. Trading is likely to be light this week because of the U.S. Independence Day holiday. U.S. government offices and financial markets will be closed Friday. The August contract is currently down $3.90 (-0.12%) an ounce to $3345.90 and the DG spot price is $3337.50.
The S&P 500 Index and the Nasdaq ended June at record highs, capping the best quarter in over a year, reducing demand for other assets like precious metals.
Hamas hasn’t yet responded to Trump’s statement Tuesday that Israel has agreed to terms for a 60-day ceasefire. If the group agrees, it could signal a halt to the conflict that has been raging since October 2023 and reduce geopolitical risk that has fueled demand for precious metals.
Separately, investors will be watching the June jobs report from the Labor Department, due out a day early this month because of the Fourth of July holiday on Friday. If the report comes in weak, it could exacerbate negative economic signals after the Fed’s favorite inflation measure, the personal consumption expenditures price index, came in higher than expected on Friday and consumer spending data was weaker than anticipated.
The Fed has said it watches inflation and the labor market when setting monetary policy.
The central bank kept interest rates unchanged at 4.25% to 4.50% last month, though policymakers signaled that the central bank is still factoring two interest rate cuts this year. Most investors tracked by the CME FedWatch Tool expect the Fed to begin interest rate cuts in September, not at policymakers’ next meeting in July.
The Fed reduced rates three times in 2024 but has held them steady this year. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
Front-month silver futures rose 0.6% Tuesday to settle at $36.40 an ounce on Comex, and the most-active September contract is up 0.1% so far this week. Silver gained 9.5% in June after adding 0.6% in May and dropping 5.2% in April. It rose 21% in 2024. The September contract is currently up $0.073 (+0.20%) an ounce to $36.470 and the DG spot price is $36.32.
Spot palladium slipped 50 cents Tuesday to $1,108.00 an ounce and is down 3.7% so far this week. Palladium surged 14% last month after advancing 2.8% in May and falling 4.9% in April. Palladium dropped 17% last year. The DG spot price is currently up $44.60 an ounce to $1152.50.
Spot platinum edged up 0.1% Tuesday to $1,347.10 an ounce, though it’s down 30 cents so far this week. It climbed 27% last month after gaining 8.6% in May and retreating 3.1% in April. Platinum lost 8.4% in 2024. The current DG spot price is up $48.90 an ounce to $1398.60.
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