Gold futures were steady near a six-year high earlier today, but dropped with the release of the U.S. monthly jobs report for June, ending the yellow metal’s six-week run of weekly rallies.
Data showed nonfarm payrolls rose the most in five months, up 224,000 jobs for June. Economists had forecast a rise of 160,000 jobs.
“The U.S. jobs data is driving all the pressure on gold right now. The payroll numbers crushed all expectations. That may decrease the urgency for a Fed cut in July,” said Chris Gaffney, president of world markets at TIAA Bank told Reuters this morning.
The CME FedWatch Tool has kept the odds of a rate cut this month at 100% since the Federal Open Market Committee’s last meeting in June and it remains at 100% so far this morning.
August gold futures climbed 0.9% Wednesday to settle at $1,420.90 on Comex. U.S. financial markets were closed Thursday because of the Fourth of July holiday. Currently, the August gold contracts are at $1,393.10, down $27.80.
Gold has gotten a boost in recent months from investors seeking a safe haven amid fears of trade disputes and tepid economic growth. The U.S. must remove all the tariffs placed on Chinese goods as a condition to reach a trade deal between the two countries, an influential blog connected to state media said on Friday, according to Bloomberg.
In an interview posted yesterday, veteran investor Mark Mobius said he believes gold is poised to push higher. In the Bloomberg interview he also said gold could potentially top $1,500 an ounce, as interest rates drop, central banks extend purchases and geopolitical uncertainty remains, adding that bullion should always form at least 10% of a portfolio.
In other news, Acacia Mining reported a 13% increase in gold reserves at its Gokona Mine in North Mara, Tanzania, as of the end of May. The higher number was driven by additional drilling in the east and west extensions of Gokona underground.
Silver futures were little changed early Friday after rising 0.6% on Wednesday. After the Jobs report Silver also fell and is currently at $14.955 for the August contracts, down $0.337.
Spot platinum, which is sensitive to the growth of the Chinese automotive industry, and palladium have also reacted this morning. The metals were up 3.7% and 4.6%, respectively, in the first three days of the week, but lost ground this morning, platinum down 3.53% and palladium .26%.
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