Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold dropped 1.5% to close under $2,025 after robust US job growth clouded the outlook for interest rates, lifting yields and the dollar while undercutting alternative stores of value. The metal still gained 1.3% for the week on safe-haven inflows.

The US added 253,000 new jobs in April, far more than expected, and the unemployment rate slipped to 3.4% from 3.5%. Perhaps more alarming for the Fed, hourly wages rose 0.5% for the month, matching the biggest jump since last summer.

But March and February totals were revised lower by 149,000 jobs, suggesting that the labor market may not be as strong as the April print would indicate.

Nonetheless, the markets were forced to grapple with the possibility that the Fed may not be as likely to cut interest rates this year as previously thought. While the likelihood of a pause in June has increased to 96%, according to Fed fund futures trading, the odds of a rate cut in July fell from 60% yesterday to 38% today.

The dollar jumped immediately following the payrolls data, pressuring gold and other commodities by making them more expensive in other currencies, curtailing overseas demand.

Benchmark 10-year Treasury yields also rose on the shifting rate view, weighing on gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Gold remains supported by the safe-haven inflows driven by the overall slowing of the economy, rising instability in the US banking sector, and uncertainty about outcome of the partisan standoff over the debt ceiling, which could cripple the US credit rating if it leads to default.

The other precious metals were mixed for the day and week. Silver slid 1.1% today but held onto a weekly rise of 2.8%. Platinum rose 1.7% for the session but fell 2% for the week. Palladium jumped 3.1% but still dropped 1.5% this week.

At the Comex close: June gold fell $30.90 to $2,024.80; July silver lost 30 cents to $25.93; July platinum added $18, to $1,068.30; and June palladium picked up $45.20 to $1,486.80 an ounce.