· Gold prices sharply down after shocking rise in US jobs in May
Gold prices are sharply lower and hit a six-week low in early U.S. trading Friday, in the immediate aftermath of a stunning and completely unexpected big rise in U.S. jobs in May.
The employment situation report from the Labor Department showed a rise of 2.51 million in non-farm payrolls in the month, which is way above market expectations for a decline of around 8 million. In the April jobs report, there was a 20.5 million drop in non-farm payrolls.
The unemployment rate of 13.3% in May was also way better than market expectations. Risk appetite is now very keen late this week, and that’s bearish for the safe-haven metals.
August gold futures were last down $37.00 an ounce at $1,690.20. July Comex silver prices were last down $0.516 at $17.55 an ounce.
Technically, the gold bulls are fading fast as a price uptrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,650.00. First resistance is seen at $1,700.00 and then at today’s high of $1,723.20. First support is seen at today’s low of $1,681.50 and then at $1,675.00. Wyckoff's Market Rating: 6.0
Gold falls over 2% as strong U.S. jobs data boosts recovery bets
· Gold prices dipped more than 2% on Friday as hopes for a global economic rebound got a boost from stronger-than-expected U.S. non-farm payrolls data, reducing demand for safe havens.
· Spot gold slid 1.9% to $1,678.81 per ounce at 1:21 p.m. ET (1721 GMT). U.S. gold futures settled down 2.6% to $1,683.
· Bullion has declined about 2.6% so far this week, on track for its biggest fall since the week ending March 13.
· “We had significantly stronger-than-expected U.S. payroll numbers - an increase of 2.5 million versus an expectation of a decline of 7.5 million - that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.
· Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.
· Wall Street surged following a crash into bear territory as the latest U.S. data showed a drastic fall in unemployment to 13.3% in May from 14.7% in April as layoffs abated.
· The data comes ahead of a two-day policy meeting of the U.S. Federal Reserve next week. The central bank has injected massive stimulus and cut interest rates to near zero to cushion the blow from the coronavirus pandemic.
· However, “we’ve still got economic uncertainty, trade tensions, problems in the (United) States,” said INTL FCStone analyst Rhona O’Connell. “For the longer term, the influences are definitely more positive (for gold) than negative.”
· Elsewhere, palladium rose 0.7% to $1,945.81 per ounce, while platinum dropped 2.3% to $817.49.
· Silver slipped 2.3% to $17.32 per ounce, and was set for its first weekly decline in five.
Reference: Kitco, Reuters
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