Gold Up on Jobs Report

Gold Flat On Stronger Dollar

Gold up on jobs report with the yellow metal seeing a modest gain as U.S. Nonfarm payrolls in March fell by 701,000 and the unemployment rate rose to 4.4%.

This is the first decline in payroll growth since September 2010. While economists had predicted a drop due to the pandemic, this was much worst than the expected 100,000 job drop.

Gold rallied Thursday as investors fled to the safe-haven asset after the U.S. Labor Department reported that initial jobless claims surged to 6.65 million last week, a new record. More than 10 million jobs have been lost because of lockdowns across the country triggered by the coronavirus pandemic. A stronger dollar is keeping a lid on the rally.

The most-active June gold futures contract rose 2.9% Thursday to settle at $1,637.70 an ounce on Comex. It decreased 1% in the first four days of the week after rising 11% last week. The yellow metal advanced 1.9% in March and 4.8% in the first quarter. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.33% Thursday to 971.97 metric tons, its highest level since 2016, Reuters reported. Currently, the June contract is at $1,639.70, while the DG spot price is $1,623.80.

Some of the biggest gold buyers may be losing their appetite for the precious metal, with Russia’s central bank halting all purchases, along with the central banks of Uzbekistan and Kazakhstan, Bloomberg reported.

Gold and other precious metals prices have gotten a boost in recent weeks as investors sought a hedge against uncertainty as the broader market plummeted, but the metals have declined as traders cashed out of their positions to cover margin calls in other assets. Then came last week’s short squeeze in gold, when traders who had bet on market declines were forced to purchase gold to make good on maturing contracts.

The virus, known as COVID-19, has killed more than 53,000 people worldwide and sickened more than 1 million. More than 24% of the cases are now in the U.S., though just 11% of the deaths. The U.S. has more cases than any other country. The virus is a WHO-designated pandemic.

May silver futures rallied 4.8% Thursday to settle at $14.65 an ounce on Comex. They advanced 0.8% in the first four days of this week after rising 17% last week. Silver tumbled 14% in March and 21% in the first quarter. The current May contract is $14.625 while the DG spot price is $14.52.

Spot palladium slid 1.7% Thursday to $2,209 an ounce and declined 5% in the first four days of this week after soaring 38% last week. It decreased 8.3% in March but surged 23% in the first quarter. The DG spot price is currently $2,228.00

Spot platinum rose 1.9% Thursday to $735.70 an ounce and is down 1.6% in the first four days of the week after climbing 21% last week. It dropped 16% in March and 25% in the first quarter. The DG spot price is currently $726.20

 

Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.