GOLD PRICE NEWS – The gold price turned higher Friday morning, by $4.81 to $1,642.45 per ounce, after the latest U.S. jobs data came in below expectations. The price of gold fell to as low as $1,626.93 in overnight trading, but rebounded after the April non-farm payrolls report showed job additions of 115,000 – well short of the 160,000 figure economists were expecting. Silver advanced modestly in conjunction with the gold price following the jobs data, by 0.3% to $30.30 per ounce.
While the headline jobs number missed estimates, the unemployment rate ticked down to 8.1% – slightly better than the 8.2% level the markets were expecting. In addition, the prior two months of non-farm payroll data were revised higher by a combined 53,000. Nonetheless, the broader financial markets responded negatively to the employment report, as the S&P 500 Index slid 0.7% to 1,381.23.
On Thursday the gold price slid $16.67, or 1.0%, to $1,637.64 per ounce, fueled by modest strength in the U.S. dollar and broad-based weakness in the commodities complex. The price of gold extended its losses after a better than expected report on weekly U.S. jobless claims – which at 365,000 were considerably below the 379,000 consensus estimate among economists. With its decline, the spot price of gold settled at its lowest level in nearly a month and cut its year-to-date gain to 4.7%.
Silver fared slightly worse than the price of gold yesterday, as it retreated $0.49, or 1.6%, to $30.20 per ounce. The sell-off brought gold’s sister precious metal to its lowest level since January 17th of this year. However, silver remains one of the better performing commodities this year, with a 9.0% rise.
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Gold shares came under heavy selling pressure alongside the gold price on Thursday, as the Market Vectors Gold Miners ETF (GDX) closed down by $1.74, or 3.8%, to $43.92 per share. The GDX fell to $43.40 on an intra-day basis yesterday, its lowest mark since March 26, 2010. In addition to weakness in precious metals, the sector has faced a headwind of disappointing earnings results from several of the world’s largest gold mining companies this week.
Yesterday, Randgold Resources (GOLD) was the latest large-cap gold producer to miss analysts’ estimates. The Company reported quarterly adjusted earnings per share of $1.01 – well beneath the $1.11 median forecast among analysts. Royal Gold (RGLD), one of the world’s largest precious metals royalty companies, also announced worse than expected earnings results. Shares of GOLD and RGLD finished the day down by 5.1% and 3.1%, respectively.
Commenting on the recent economic data and the potential impact on the gold price, Saxo Bank vice president Ole Hansen stated that “The focus for the next 24 hours will be the jobless report tomorrow. The (jobless) claims were a bit lower than expected and could have done some of the damage…We are still rangebound (on gold), but people do worry that the technical picture could increasingly turn negative over the coming weeks unless we see a weak number tomorrow.”
