Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold was little changed, edging up a dime in choppy trade to hold above $2,042, after a strong jobs report was negated by weak ISM data, undercutting the dollar and lifting alternative stores of value. The metal lost 1.9% for the week under pressure from sharp increases in yields and the dollar.

The government’s nonfarm payrolls report showed a robust 216,000 new jobs added in December, exceeding forecasts of around 170,000, while the unemployment rate remained unchanged at 3.7%. Wages rose 0.4%, slightly more than expected.

But the upbeat employment news was quickly undercut by data showing growth in the US services sector almost completely stalled in December. The ISM index of services industries fell to its lowest reading since last May at 50.6, where anything under 50 indicates contraction. The services sector comprises around two-thirds of the economy.

Perhaps more ominous, employment in the services sector plunged to 43.3 last month, the lowest since July 2020, when the economy was in the depths of the pandemic.

The dollar initially rallied to a three-week high after the strong payrolls report but then slipped to a session loss of 0.4% on worries that the ISM data is signaling an imminent US recession. The buck still rose 0.6% for the week, its best in a month.

Gold largely tracked with the dollar, falling after the NFP release and recovering on the ISM. Capping gold’s gains, benchmark 10-year Treasury yields pushed above 4% and held there, increasing the opportunity cost for holding gold instead of bonds as a safe-haven asset.

For the week, yields jumped around 15 basis points after mildly hawkish minutes from the Fed’s December meeting shifted speculation about how soon and aggressively the central bank will begin cutting interest rates.

Today’s sobering ISM services data shifted the rate view again, this time back in a dovish direction. Fed funds futures traders now see a 71% likelihood of a quarter-point cut in March, up from 55% earlier today but still down from around 90% last week.

The other precious metals were mixed for the day and down for the week. Silver and platinum both added 0.6% today but tallied weekly losses of 3% and 2.3%, respectively. Palladium was nearly flat today, inching down 70 cents, while shedding 6.4% for the week.

At the New York spot close: gold gained 20 cents to $2,042.40; silver picked up 13 cents to $23.23; platinum added $5.50, to $971.80; and palladium edged down 70 cents to $1,037.10 an ounce.