Gold slips early Monday on investor profit taking following a rally sparked by the June U.S. jobs report last week.
The yellow metal advanced to the highest level in more than a month on Friday after the U.S. jobs report showed that the labor market softened last month, solidifying expectations of an upcoming interest rate cut by the Federal Reserve. The prospect of lower interest rates is bullish for gold because it makes the precious metal a more attractive alternate investment. The weaker dollar is also bullish for gold.
August gold futures rose 2.5% last week to settle at $2,397.70 an ounce on Comex. The most-active contract gained 1.2% Friday. U.S. financial markets closed Thursday for the Independence Day holiday. Bullion fell 0.3% last month after gaining 1.9% in May and 2.9% in April. The metal rose 13% in 2023. The August contract is currently down $14.80 (-0.62%) an ounce to $2382.90 and the DG spot price is $2374.80.
U.S. payrolls rose 206,000 jobs last month after steep downward revisions, according to Labor Department data released Friday. Economists surveyed by Bloomberg had forecast at 190,000 job increase.
The minutes of the June Fed policy meeting, which came out Wednesday, showed that central bankers aren’t ready to cut rates until they have “greater confidence” that inflation is moving toward the Fed’s 2% goal. But the jobs report on Friday solidified thinking that there may be two cuts this year, in September and December.
The Fed has kept interest rates steady at 5.25% to 5.50% for about a year after raising them by 5.25 percentage points since March 2022 to rein in inflation. Interest rates affect gold prices because they influence the attractiveness of the yellow metal in respect to other assets.
The CME FedWatch Tool shows 95.3% of the investors tracked are betting that the Fed will keep rates unchanged this month. But 79% expect the central bank to start cutting in September. The Fed kept interest rates unchanged again in June.
In France, initial projections showed that a leftist alliance that the markets had mostly written off were headed for victory. The idea of a far-right win had depressed the euro against the dollar in recent weeks.
September silver futures rose 7.2% last week to settle at $31.69 an ounce on Comex after the front-month contract gained 2.8% Friday. Silver fell 2.9% last month after surging 14% in May and rising 7% in April. It ticked up 0.2% in 2023. The September contract is currently down $0.339 (-1.07%) an ounce to $31.350 and the DG spot price is $31.08.
Spot palladium rose 5.1% last week to $1,042.00 an ounce after gaining 0.1% Friday. Palladium rallied 8.1% last month after declining 5.1% in May and losing 5.9% in April. Palladium plummeted 38% last year. The current DG spot price is down $22.60 an ounce to $1022.00.
Spot platinum rallied 3.5% last week to $1,039.10 an ounce after advancing 3.4% Friday. Platinum fell 3.7% last month after advancing 10% in May and 3.1% in April. Platinum dropped 6.8% in 2023. The DG spot price is currently down $28.20 an ounce to $1009.80.
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