Gold steady despite this morning’s jobs data that shows a surprising surge for February. The yellow metal rose early Friday, heading for its best week since May, as the Russian invasion of Ukraine escalated and investors sought out safe-haven assets.
U.S. job growth jumped in February, growing by 678,000, a serious leap beyond the estimated 440,000 jobs. The unemployment rate was 3.8%, slightly beating the estimated 3.9%. An interesting number is wage growth. In what could be an indicator that inflation is slowing, wages rose a scant 1 cent an hour or 0.03% in February, compared to estimates for a 0.5% gain.
In the latest developments in Ukraine, government officials there said the country was safely shutting down reactors at the Zaporizhzhia power plant, Europe’s largest nuclear plant, after it was attacked by Russia and set ablaze.
Meanwhile, investors were awaiting the release Friday of the monthly U.S. jobs report for February for economic direction a day after Federal Reserve Chairman Jerome Powell told a congressional panel that he would support a quarter-point interest rate increase at the central bank’s March meeting.
Front-month gold futures rose 0.7% Thursday to $1,935.90 an ounce on Comex and rallied 2.6% in the first four days of the week. Gold gained 5.8% last month after dropping 1.8% in January, its worst month since September. It retreated 3.5% in 2021. The April contract is up $9.80 (+0.51%) an ounce to $1,945.70 and the DG spot price is $1,952.70.
Russia’s finance ministry said Thursday it was halting purchases of foreign currency and gold for the rest of this year. Meanwhile, the London Bullion Market Association told Reuters it was investigating whether six Russian gold refiners it accredits have links with entities that fall under Western sanctions. If links are found, they could affect the refiners’ LBMA accreditation.
Palladium surged and was poised for its best weekly rally in almost two years. Russia produces about 40% of the world’s palladium which is mainly used in catalytic converters for gasoline-powered vehicles. There are already vehicle shortages and price increases for automobiles, and Russia’s Nornickel Mining Company is the world’s largest supplier of palladium.
Spot palladium rose 4.8% Thursday to $2,800.00 an ounce and has surged 17% so far this week. Palladium gained 5.3% last month after rallying 24% in January. It retreated 22% in 2021. As of this report, the DG spot price is up $194.20 an ounce to $2,960.50, flirting with its all-time high of $3,017.
The Fed’s Powell told lawmakers this week that the Fed should have acted earlier to combat soaring inflation in remarks to Congress on Wednesday and Thursday. He also suggested that the conflict in Ukraine will make inflation worse. The personal consumption expenditures price index, which the Fed uses to track inflation, rose the most year-on-year since 1982 in January, according to data released last week.
High inflation is bullish for gold, though rate increases are bearish.
Front-month silver futures advanced 0.1% Thursday to $25.21 an ounce on Comex and is up 5% so far this week. Silver surged 8.8% in February after dropping 4.1% in January. It fell 12% in 2021. Silver prices are tied to industrial demand. Currently the May contract is up $0.0693 (+0.25%) an ounce to $25.275 and the DG spot price is $25.27.
Spot platinum increased 0.6% Thursday to $1,086.60 an ounce and is up 2.7% so far this week. The metal advanced 1.7% in February after rising 5.7% in January. It lost 9.4% last year. The DG spot price is currently up $8.90 an ounce to $1,096.00.
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