Gold capped its biggest six-day rally in more than two years on Thursday amid the possibility of a U.S. interest rate cut and fears of a global trade war. Today, the yellow metal looks to continue that run with this morning’s first economic data.
First gold rose when non-farm payroll numbers failed to miss the mark by a wide margin and that rise continued with the release of the jobs report. The Bureau of Labor Statistics reporting 75,000 jobs created in May. Economists were expecting 177,000. That substantial miss has sent Gold trading near the highest point in three months.
The jobs numbers and the monthly unemployment rate are key barometers of the nation’s economic health. This negative report could drive investors to gold as a safe-haven asset. And employment trends are closely watched for signs on when the Fed might act. Rate cuts typically cause gold to rise.
Gold prices have climbed in recent weeks as investors sought a safe haven to sit out a potential trade war with China. Both Citigroup and Morgan Stanley warned this week that an escalation of the dispute could send the world into a recession. But China’s central bank chief told Bloomberg that the country has “tremendous” room to adjust monetary policy if the trade war with the U.S. deepens.
“We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous,” People’s Bank of China Governor Yi Gang said in an interview in Beijing.
Group of 20 finance ministers and central bank governors are gathering in Japan over the weekend, and Yi is scheduled to meet with U.S. Treasury Secretary Steven Mnuchin on the sidelines of the event.
Gold, silver, platinum and palladium were all up for the week, as of Thursday’s close.
Both gold and silver futures had good weeks. August futures for gold this morning is now over $1,348, up $5.30, while August Futures for silver sit at $15.055, up $.114.
Spot palladium rose 1.4% Thursday and is up 1.9% for the week. Spot platinum, which is sensitive to the growth of the Chinese automotive industry, slid 0.2% Thursday, but has added 1.2% so far this week.
Meanwhile, gold imports by India, the world’s second-biggest consumer of the precious metal, jumped 49% in May from a year earlier as a Hindu and Jain festival boosted retail demand, a government source told Reuters this week.
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