Gold yo-yos on jobs report, initially slipping on the positive numbers, but then regaining close to daily highs.
The yellow metal climbed above the $1,780 level earlier this morning on worries over the spreading delta variant. When U.S. nonfarm payrolls showed an increase of 850,000 in June, beating the market estimate of 706,000, gold slipped by $5 an ounce. Then the bullion regained altitude on the less than stellar unemployment rate that unexpectedly rose to 5.9% vs. the 5.6% estimate.
Futures were little changed for the week as of Thursday. Gold came under pressure as the dollar reached a three-month high, making the yellow metal less attractive as an alternate investment. But after the biggest monthly decline since 2016 in June, it attracted some buyers anticipating that prices would rise.
Concerns about inflation have also kept a floor under prices. Gold is a traditional hedge against inflation. Globally, the delta variant of the COVID-19 virus continued to spread, raising concern about whether the coronavirus pandemic is really winding down and supporting the yellow metal.
August gold futures rose 0.3% Thursday to settle at $1,776.80 an ounce on Comex. The front-month contract lost $1 in the first four days of this week. It fell 7% in June in the worst month since November 2016 after advancing 7.8% in May, the best month for the precious metal since July 2020. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 6.2% so far in 2021. Currently, the August contract is up $17.60 (+0.99%) an ounce to $1,794.40 and the DG spot price is $1,792.90.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.3% Thursday to 1,043.16 metric tons, Reuters reported.
Economic news out Thursday showed that U.S. weekly initial jobless claims fell to a pandemic-era low of 364,000 last week, beating an estimate of 390,000. Meanwhile, the Institute for Supply Management reported that U.S. manufacturing grew moderately last month, but its index slipped to the lowest level since January.
The economic data is expected to influence the Fed’s timeline to increase interest rates and scale back stimulus measures, which would be considered bearish for gold.
September silver futures retreated 0.4% Thursday to settle at $26.10 an ounce on Comex. The front-month contract dropped 0.1% the first four days of the week. Silver dropped 6.5% in June after rallying 8.3% in May. The metal rose 47% in 2020 and is down 1.2% so far this year. The September contract is currently up $0.535 (+2.05%) an ounce to $26.635 and the DG spot price is $26.55.
Spot palladium decreased 0.4% Thursday to $2,783.00 an ounce, though it’s up 5% in the first four days of this week. It retreated 1.8% in June after losing 4.1% in May. It’s up 14% so far in 2021. The DG spot price is currently up $16.60 an ounce to $2,795.50.
Spot platinum gained 0.9% Thursday to $1,090.40 an ounce and retreated 1.8% in the first four days of this week. It dropped 9% in June after losing 1.5% in May. The autocatalyst metal is up 1.6% in 2021. Currently, the DG spot price is up $13.30 an ounce to $1,101.70.
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