Gold Steady Despite U.S. Jobs Report

Gold Steady Despite U.S. Jobs Report

Gold steady despite U.S. jobs report early Friday as the world markets continue to watch the spread of the coronavirus and its impact on the global economy.

Rosy U.S. employment statistics reported this morning including a surge in Nonfarm payrolls to 225,000 for January, far above the forecasted 158,000 gain. Average hourly earnings are also up 3.1% over a year ago to $28.44, the industry was expecting 3% growth. The only less than shiny data released this morning was a slight uptick in the unemployment rate to over 3.5%, but economists report that rise is due to more people re-entering the labor force.

Gold had rallied Wednesday and Thursday amid fears about the potential economic impact of the coronavirus, but the precious metal’s advance was mitigated by Chinese tariff cuts on some U.S. goods. Platinum and palladium, which are used in automobile manufacturing, fell after Ford Motor Co. reported weaker car sales.

Front-month gold futures rose 0.5% Thursday to settle at $1,570 an ounce on Comex. The April contract declined 1.1% in the first four days of the week, heading for its worst week since early November. Futures gained 4.3% in January, the best monthly performance since August. Currently, the April contract is at $1,573.00.

The coronavirus is a World Health Organization-designated global health emergency which has killed more than 600 people worldwide and sickened more than 31,000. It was first detected in Wuhan, China, and has shut down large swaths of the country. Some countries have restricted travel from China and international airlines have suspended flights.

Earlier this week, China pledged to mitigate the economic hit from the virus with government spending, tax relief and subsidies for virus-hit sectors supported equites. But fallout from the virus has already roiled some commodity markets. Bloomberg reported that a Chinese buyer of liquefied natural gas and a copper importer declared force majeure to cancel contracts.

China said Thursday it would halve tariffs on $75 billion in U.S. imports which were imposed in September during the height of the trade war between the two countries.

Spot palladium, a metal used primarily in autocatalysts, fell 3.6% Thursday but is up 2.5% in the first four days of the week. It climbed 18% last month, setting new records amid a supply crunch. Spot platinum fell 2% Thursday and is up 0.3% since last week.

Ford forecast 2020 profit below analyst’s expectations earlier this week, Bloomberg reported. The automaker’s vehicle sales have fallen for three years in the U.S., while it’s also losing billions of dollars overseas. Its sales in China fell by half in the past three years.

In economic news, earlier this week, the U.S. weekly jobless claims fell to a nine-month low, beating expectations. The number of applications for new unemployment benefits fell by 15,000 to 202,000 in the week ended Feb. 1, government data showed. Economists polled by MarketWatch had forecast a figure of 215,000.

Silver rallied 1.2% Thursday to settle at $17.82 an ounce on Comex. The March futures contract retreated 1.1% in the first four days of the week. Silver futures rose 0.5% in January, lagging gold’s advance.

 

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