Breaking News

Gold down almost 1% as investors reassess U.S. jobs report

CommoditiesMay 09, 2016 02:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
Gold under pressure in early trade - Gold futures fell sharply in European trade on Monday, as investors viewed Friday’s U.S. jobs data as less disappointing than first thought.

The Labor Department reported that the U.S. economy added 160,000 jobs last month, the smallest increase since September and well below the 202,000 jobs forecast by economists. The unemployment rate remained steady at 5%.

The one bright sport of the report showed that average hourly earnings rose by eight cents or 0.3%, bringing the year-on-year increase to 2.5% from 2.3% in March.

Also weighing on the precious metal were remarks by a senior Federal Reserve official on Friday, who indicated that U.S. interest rates could still rise sooner than expected. New York Fed President William Dudley said that it was reasonable to expect two rate hikes this year despite weaker-than-expected April data on hiring.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose to 94.04 in early trade Monday, the most since April 28. It last stood at 93.92, up 0.1% for the day.

Gold for June delivery on the Comex division of the New York Mercantile Exchange fell by as much as 1.1% to a daily low of 1,280.50 a troy ounce, before recovering slightly to $1,282.15 ounce by 06:45GMT, or 02:45AM ET, down $11.85, or 0.92%.

On Friday, gold rallied $21.70, or 1.71%. Prices of the precious metal advanced $3.50, or 0.29%, last week, the second straight weekly gain, amid indications the Fed will take a slow and cautious approach to raising interest rates this year.

A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Prices of the yellow metal are up nearly 20% so far this year as expectations faded that the Fed would move to normalize interest rates due to fears over the global economy.

Gold is sensitive to moves in U.S. rates, as a rise would lift the opportunity cost of holding non-yielding assets such as bullion.

In the week ahead, investors will continue to focus on U.S. economic reports to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016, with Friday’s retail sales data in the spotlight. In addition, there are more than a half-dozen Fed speakers on tap as traders search for more clues on the timing of the next U.S. rate hike.

Elsewhere on the Comex, silver futures for July delivery shed 11.7 cents, or 0.67%, to trade at $17.41 a troy ounce during morning hours in London, while copper futures declined 3.7 cents, or 1.72%, to $2.117 a pound.

New York-traded copper prices plunged 11.7 cents, or 5.62%, last week, its largest weekly loss since early 2015, on worries over China's economy.

Monthly trade data released on Sunday, which showed that both exports and imports fell more than expected in April, added to concerns over the health of the world’s second largest economy.

Exports slumped 1.8% from a year earlier, worse than forecasts for a decline of 0.1%, while imports dropped 10.9%, compared to expectations for a fall of 5.0%. That left China with a surplus of $45.6 billion last month, the General Administration of Customs said.

The Asian nation will also publish data on April consumer and producer price inflation on Tuesday, followed by reports on industrial production, fixed asset investment and retail sales late on Friday.

China is the world’s largest copper consumer, accounting for nearly 45% of world consumption.

Gold down almost 1% as investors reassess U.S. jobs report

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
David Kranzler
David Kranzler May 09, 2016 10:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold is down because investors reassessed the jobs report? Seriously? Where do you get this material from? The school for mentally challenged reporters? That's the most absurd reason given for the hit on gold I've heard yet.
0 0
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email