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Gold prices were slightly higher Friday, as investors absorbed fresh data showing stronger-than-expected U.S. employment data.
Edging up ahead of the data, June gold futures
GC00,
GCM22,
added to gains, then pared those back. The contract rose $4.60, or 0.2%, to $1,880.10 per ounce, after closing up 0.4% to $1,875.70 an ounce on Thursday. Also paring back, silver futures
SI00,
SIN22,
were flat at $22.44 per ounce, a day after gaining 0.2%.
U.S. April nonfarm payrolls rose 428,00 compared with expectations for a rise of 400,000, while March job gains were lowered slightly. U.S. hourly wages rose 10 cents, or 0.3%.
U.S. stock index futures
ES00,
NQ00,
remained under pressure, while the dollar
DXY,
flattened and Treasury yields backed off.
Earlier Thursday’s modest gains for gold and silver came amid tumbling stock markets, rising Treasury yields and a surging dollar, with investors spooked over fears the Federal Reserve may not be able to get inflation under control without triggering an economic slowdown.
Stocks had earlier rallied Wednesday after the Federal Reserve’s as-expected 50 basis point interest rate hike, and a perception by investors that the central bank was less hawkish than markets believed.
The Fed hike was followed on Thursday by the Bank of England raising interest rates for the fourth time and by a bleak economic forecast that triggered a plunge in the pound
GBPUSD,
and surge in the dollar. The European Central Bank is also expected to raise rates in July. The Bank of England’s gloom contrasted with the Fed’s position that it can keep a recession at bay.
“While Fed Chair Jerome Powell mentioned in his comments that followed the rate decision that the bank is not ‘actively considering’ increases of 75 basis points, further hikes of 50 basis points are highly likely in the coming months,” said Rupert Rowling, market analyst at Kinesis Money, in a note to clients.
“Gold is struggling to gain traction in this environment of rising interest rates and now looks set for a sustained period below $1,900 an ounce. While the bullish support of the ongoing war in Ukraine will limit how far gold declines, this is currently outweighed by the bearish driver of central banks tightening their monetary policy-making non-yield bearing assets such as gold less attractive,” he said.
In other metals trade, July copper
HGN22,
slipped 0.2% to $4.283 a pound.
July platinum
PLN22,
fell 2% to $954 an ounce, while June palladium
PAM22,
fell 3.2% to $2,104 an ounce.
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