Gold News & Info

Source:Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.7% from yesterday's five-week high but held above $1,173 after strong growth in U.S. wages boosted the dollar and equities, cutting into demand for safe-haven assets. The metal closed the week 1.8% higher for its second straight weekly win.

The Labor Department reported that nonfarm payrolls added 156,000 new jobs in December, fewer than forecast, with the biggest increases coming in health care, financial services, and manufacturing. The unemployment rate ticked up from 4.6% to 4.7% as more jobseekers entered the market.

The so-called U6 unemployment rate, which includes part-time workers seeking full time jobs, remained much higher at 9.2%–well-above the 8% level before the Great Recession began in late 2007.

Most encouraging was data showing that average wages jumped 0.4% last month for an annual gain of 2.9% in 2016, the fastest rise in almost eight years. Weak wage growth has been an unhappy hallmark of this long recovery, and a main impediment to tighter monetary policy.

The dollar recouped 0.8%, boosted by speculation that rising wages may nudge the Fed toward more aggressive rate hikes in 2017. But it couldn�t fully rebound from yesterday's 1.2% loss, which came after the Fed minutes from December emphasized "considerable uncertainty" about the course of monetary policy next year. It closed the week down 0.2%.

Further pressuring the dollar's near-term prospects, China strengthen the yuan by nearly 1%, the most in a day since 2005, while boosting borrowing cost by more than 60%. The PBOC made a similar move last January, triggering a rally in the yuan that contributed to the dollar's 6% decline from January to June.

U.S. stock markets also rose modestly on the wage data, with the S&P 500 and Dow adding around 0.4%. The gains came despite Commerce Department data showing a 2.5% decline in factory orders in November.

The other precious metals were mixed on the day but higher for the week. Silver slid 0.7% but held a 3.3% weekly gain. Platinum dropped 0.6% but closed the week 7.2% higher. Palladium gained 2.7% for a weekly rise of 11%. Used in catalytic converters, both PMGs benefitted from a recent data showing record-high global auto demand in 2016.

At the Comex close: February gold slipped $7.90 to $1,173.40; March silver fell 12 cents to $16.52; April platinum slid $5.40 to $970.60; and March palladium gained $20.15 to $758.35 an ounce.