BD: Gold price makes modest gains after weak US jobs report
The gold price made modest gains on Friday after US labour market data came in slightly weaker than expected in the previous session, lending support to precious metals.
Spot gold was last up $3.10 on Thursday’s close at $1,168.40/1,169.20 per ounce, having traded in an intraday range of just $5 so far. Silver was up two cents at $15.66/15.71 while palladium and platinum were unchanged at $688/694 and $1,080/1,085 respectively.
“The precious metals are all weak – gold and silver are extending below support levels of recent months but continue to find some dip buying, as have the PGMs, especially palladium. On balance we would expect trading to become choppier in this low ground – there is a risk of fund short-covering should rebounds get going,” FastMarkets analyst William Adams said.
In the blockbuster US jobs report on Thursday, released a day early due to Independence Day celebrations, the June reading of 223,000 new non-farm jobs was below the forecast 231,000.
While the unemployment rate dropped to its lowest since April 2008 at 5.3 percent, a level the US government considers to be ‘full employment’, average hourly earnings were stagnant, missing predicted growth of 0.2 percent.
“The majority of market participants clearly now expect a later start to the series of interest-rate hikes by the US Federal Reserve,” Commerzbank said.
The market is also watching developments in the Greek debt crisis – the focus is on Sunday’s referendum on its creditors’ proposed cash-for-reforms deal. Greece requires additional bailout funds of around 50 billion euros until 2018 under the existing bailout conditions, the IMF claimed, cutting its Greek growth prospects for 2015 to zero from 2.5 percent previously.
In data, the Chinese HSBC services PMI at 51.8 missed consensus of 53.8. The rout in Asian stock markets continued, with the SCI closing 5.4 percent lower – it is down nearly 25 percent on a one-month basis.
In the eurozone, the Spanish services PMI at 56.1 was short of consensus at 58.0 as was the German number at 53.8 against expectations of 54.2. The Italian number bettered forecasts at 53.4, with the aggregate eurozone figure as expected at 54.4. EU retail sales at 0.2 percent also came in better than consensus.
The euro is slightly stronger against the dollar this morning at 1.1114 while European equity markets are all in negative territory. The Stoxx was last down 0.68 percent, the Dax 0.42 percent and the Cac-40 0.67 percent.
