Gold keeps its overnight rally going following the morning’s upbeat jobs report. The yellow metal had risen on bargain hunting, but looks still poised for a weekly loss despite continued concern about the effect of tariffs on U.S. and global growth.
Economists got a welcome surprise in this morning’s jobs numbers. Nonfarm payrolls increased a seasonally adjusted 177,000 for the month. While that number is slightly below March’s downwardly revised 185,000, it is above the Dow Jones estimate of 133,000. The unemployment rate sits at the forecasted 4.2% while average hourly earnings rose just 0.2% for the month, below the 0.3% forecast.
Earlier in the week, the U.S. private payrolls report from ADP came in well below expectations, setting the stage for a possibly poor labor market news from the Labor Department. Weekly initial jobless claims from the Labor Department came out Thursday and showed that new applications for unemployment benefits climbed more than expected.
June gold futures fell 2.9% Thursday to settle at $3,222.20 an ounce on Comex, and the front-month contract was down 2.3% in the first four days of the week. Bullion increased 5.4% in April after gaining 11% in March and adding 0.5% in February. It’s up 22% so far this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract is currently up $34.40 (+1.07%) an ounce to $3256.60 and the DG spot price is $3247.60.
Private payrolls grew by just 62,000 jobs last month, according to data released Wednesday. It was the smallest increase since July and well below the expected gain of 120,000. The figure was 147,000 in March. Weekly initial jobless claims rose 241,000 last week, up 18,000 from the prior week and more than economists’ estimate of 225,000.
“Unease is the word of the day,” ADP Chief Economist Nela Richardson said in the private payrolls release. “Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data.”
Friday’s April U.S. jobs report is likely to indicate how widespread the impact of government cuts over the past three months have been on the labor force. A separate government report Tuesday showed that the number of U.S. job openings dropped last month to the lowest level since September. The Fed closely watches both inflation and the labor market when setting monetary policy.
The central bank has been widely expected to continue interest rate cuts this year. Currently, 58.8% of investors tracked by the CME FedWatch Tool expect the Fed to keep rates the same in their next two policymaker’s meetings in May and June, while 87.6% expect a rate cut in the July meet of at least 25 basis points. Lower interest rates are typically bullish for gold.
The Fed left rates unchanged at 4.25% to 4.50% at policymakers’ last meeting in March but reduced rates three times in 2024. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
Front-month silver futures fell 1.1% Thursday to settle at $32.47 an ounce on Comex, and the July contract lost 2.6% in the first four days of the week. Silver dropped 5.2% last month after advancing 9.9% in March and retreating 2.4% in February. It gained 21% in 2024. The July contract is currently up $0.006 (+0.02%) an ounce to $32.475 and the DG spot price is $32.19.
Spot palladium edged up $1 Thursday to $949.00 an ounce and is up 0.4% so far this week. Palladium fell 4.9% last month after rising 7.3% in March and retreating 10% in February. Palladium dropped 17% last year. Currently, the DG spot price is up $7.70 an ounce to $955.50.
Spot platinum decreased 0.5% Thursday to $970.40 an ounce and is down 0.6% so far this week. Platinum retreated 3.1% in April after increasing 6.7% in March and sliding 4.7% in February. Platinum lost 8.4% in 2024. The DG spot price is currently up $8.20 an ounce to $975.50.
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