Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.6%, closing at an 11-week low near $1,168, after an unexpectedly robust U.S. jobs report increased the odds of a rate hike by the Federal Reserve this fall. The metal finished 1.8% lower for the week.

U.S. nonfarm payrolls added 280,000 jobs in May, well above forecasts, for its biggest monthly increase since December. Gains came in all sectors of the labor market except energy. Totals for April and March were also revised higher by 32,000.

The unemployment rate ticked up to 5.5% from 5.4%, but this small increase was attributed to more jobseekers entering the market. The surge in hiring was also accompanied by an increase in hourly wages, suggesting that inflation may soon creep up toward the Fed's target of 2%. Low inflation has been an impediment to higher interest rates.

While job creation was solid in May, its pace remains much slower than during the last two quarters of 2014, when the economy was averaging 281,000 new jobs per month. So far this year the average is 217,000. Hiring does not does take into account the persistence of underemployment�workers in part-time positions who want full-time, and those whose positions fall short of their experience and skillsets.

The dollar rallied on the jobs data, adding 0.6% against a basket of rivals as traders speculated that the Fed will be more likely to raise interest rates this fall. Based on CME FedWatch, which tracks Fed futures contracts, the market now sees the first hike coming in October. Prior to today's job report, December or January were forecast as more likely. Rising interest rates typically support the dollar, weighing on gold and other commodities denominated in it for international trade by making them more expensive to foreign buyers.

The other precious metals tracked lower with gold for the day and week. Silver fell 0.7% for a weekly decline of 4.3%. Platinum also dropped 0.7% to lose 1.8% this week. Palladium slid 0.6% for a 3.4% weekly loss.

At the Comex close: August gold fell $7.10 to $1,168.10; July silver lost 12 cents to $15.98; July platinum dropped $7.20 to $1,092; and September palladium slid $4.35 to $750.95 an ounce.