Gold tips down on a stronger than expected jobs report, but the yellow metal is still aiming for a weekly advance, while silver hits a 13-year high.
This morning’s Bureau of Labor Statistics report shows nonfarm payrolls rose 139,000 for May, exceeding the Dow Jones forecast of 125,000, but a bit below April’s downwardly revised 147,000 jobs. Unemployment held at 4.2%, as expected while worker pay grew more than expected, with average hourly earnings up 0.4% during the month and 3.9% from a year ago.
On Wednesday, the private payrolls report from ADP came in at the lowest level in two years. The weak numbers offset pressure to gold prices from the possibility of easing trade tensions between the U.S. and China after a call between U.S. President Donald Trump and Chinese President Xi Jinping.
August gold futures fell 0.7% Thursday to settle at $3,375.10 an ounce on Comex, though the front-month contract gained 1.8% in the first four days of the week. Bullion slipped 0.1% last month after increasing 5.4% in April and gaining 11% in March. It’s up 28% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The August contract is currently down $2.60 (-0.08%) an ounce to $3372.50 and the DG spot price is $3346.70.
Investors have been jittery in recent weeks amid uncertainty around Trump’s trade and tariff policies and their effect on the economy as well as the potential additions to the deficit from the Republican tax bill currently in Congress. Trump said that talks between the U.S. and China would begin shortly.
Separately, private payrolls rose by just 37,000 in May, the lowest monthly amount since March 2023, according to the ADP Employment Report. Trump immediately blamed Federal Reserve Chairman Jerome Powell and called for interest rates cuts. Separately, applications for new U.S. unemployment benefits rose to the highest level since October in weekly data out Thursday.
The Fed closely watches inflation and the labor market in determining monetary policy.
Last month, the central bank left interest rates unchanged again at 4.25% to 4.50%. Most investors tracked by the CME FedWatch Tool expect the Fed to begin interest rate cuts in September, not the next two scheduled policy meetings in June and July. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive alternate investment.
The Fed held rates at policymakers’ meetings this year after reducing them three times in 2024. 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. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
Front-month silver futures rallied 3.4% Thursday to settle at $35.81 an ounce on Comex, and the July contract climbed 8.4% in the first four days of the week. Silver added 0.6% in May after dropping 5.2% in April and advancing 9.9% in March. It gained 21% in 2024. The July contact is currently up $0.565 (+1.58%) an ounce to $36.370 and the DG spot price is $36.24.
Spot palladium rose 0.5% Thursday to $1,011.50 an ounce and is up 3.8% so far this week. Palladium advanced 2.8% last month after falling 4.9% in April and rising 7.3% in March. Palladium dropped 17% last year. The current DG spot price is up $43.60 an ounce to $1052.00.
Spot platinum gained 3.8% Thursday to $1,141.70 an ounce and is up 7.7% so far this week. It surged 8.6% in May after retreating 3.1% in April and increasing 6.7% in March. Platinum lost 8.4% in 2024. The DG spot price has currently jumped up $44.50 an ounce to $1182.00.
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