Gold prices were slightly higher Friday, as investors absorbed fresh data showing stronger-than-expected U.S. employment data, but headed for a third straight week of declines.
June gold futures GC00, +0.66% GCM22, +0.66% added to gains after the jobs data, then pared those back. The contract rose $ 11.50, or 0.6%, to $ 1,886.90 per ounce, after closing up 0.4% to $ 1,875.70 an ounce on Thursday. Still, the precious metal was headed for a third straight week of declines, and the longest stretch for the most-active contract since Dec. 3, 2021, according to Dow Jones Market Data.
“We do expect more investment demand from gold this year,” said Robert Minter, director of ETF investment strategy at abrdn. He pointed to markets having trouble parsing what the new interest rate regime looks like as central bankers look to cool inflation.
“Clearly, there will be higher interest rates,” he said by phone Friday. “Clearly, there will be higher inflation. The question is, are you looking at dramatically higher interest rates.”
Silver futures SI00, +0.08% SIN22, +0.08% also were up 0.2% at $ 22.50 per ounce, a day after gaining 0.2%.
U.S. April nonfarm payrolls rose 428,00 compared with expectations for a rise of 400,000, while March job gains were lowered slightly. U.S. hourly wages rose 10 cents, or 0.3%.
U.S. stock index SPX, -0.53% DJIA, -0.54% COMP, -0.78% remained under pressure, while the dollar DXY, -0.32% dipped and Treasury yields edged up.
Gold and silver booked modest gains Thursday as stock markets tumbled. Treasury yields rose and the dollar surged, as investors were spooked over fears the Federal Reserve may not be able to get inflation under control without triggering an economic slowdown.
Stocks initially rallied Wednesday after the Fed’s as-expected 50 basis point interest rate hike, particularly with a 75 basis point increase off the table at its next meeting.
The Bank of England also raised interest rates for the fourth time, while offering a bleak economic forecast that triggered a plunge in the pound GBPUSD, -0.07% and surge in the dollar. The European Central Bank is also expected to raise rates in July. The Bank of England’s gloom contrasted with the Fed’s position that it can keep a recession at bay.
“Gold is struggling to gain traction in this environment of rising interest rates and now looks set for a sustained period below $ 1,900 an ounce,” Rupert Rowling, market analyst at Kinesis Money, in a note to clients. “While the bullish support of the ongoing war in Ukraine will limit how far gold declines, this is currently outweighed by the bearish driver of central banks tightening their monetary policy-making non-yield bearing assets such as gold less attractive,” he said.
In other metals trade, July copper HGN22, -0.51% slipped 0.5% to $ 4.27 a pound.
July platinum PLN22, -1.77% fell 1.7% to $ 956 an ounce, while June palladium PAM22, -6.36% fell 6% to $ 2,048 an ounce.