Gold and Silver Gain on Conflicting Employment News


Last week, gold saw a modest decline as stronger-than-expected U.S. economic data upped the odds of more interest rate hikes. This week was shortened in terms of trading days, as markets were closed on Tuesday in observance of the Independence Day holiday in the U.S.On Monday, investors were greeted with news that U.S. manufacturing activity had contracted for the 8th consecutive month. Data came from The Institute for Supply Management’s Manufacturing Survey, which was at its lowest point since Covid lockdowns in May of 2020. Treasury yields and the dollar edged lower following the news, while gold managed a slight gain from $1,919 to $1,925.On Wednesday, investors parsed minutes from the Fed’s June 13th-14th policy meeting. The minutes showed that some participants supported raising rates at the June meeting. Ultimately, rates were left unchanged at 5%-5.25%. Participants in the June meeting also favored two additional 0.25% rate hikes in 2023 and forecasted a recession in the U.S. later in 2023.U.S. stocks slid lower following the Fed minutes release, while the prospect of higher rates pressured gold 0.5% lower to a closing price of $1,917. Meanwhile, silver saw a divergence from gold with a 1.5% daily uptick to $23.13 an ounce.Wall Street equities were lower again on Thursday as better-than-expected jobs news amplified concerns over higher interest rates. ADP data showed that private sector jobs in the U.S. had jumped by 497,000 when 220,000 was expected. This sentiment pressured gold and silver to the downside. On Thursday, the pair would touch their respective weekly lows of $1,911 and $22.57.However, there would be a divergence in news on the jobs front when on the same day, jobless claims in the U.S. neared a 1-year high at 248,000. While the negative unemployment news conflicted with private sector growth, markets were more reactive to the surprise jump in private sector jobs.Stocks were lower again this morning following the release of nonfarm data which revealed that U.S. employers added 209,000 jobs last month, when 240,000 was forecasted by economists. Stocks are mixed this week amid the conflicting jobs data. As this is written, the Dow Jones Industrial Average is nearly 1% lower for the week, while the S&P 500 and Nasdaq Composite are looking at 0.12% and 0.36% respective weekly gains.Gold and silver both turned weekly losses into likely gains following this morning’s weaker nonfarm payroll print. Currently, gold is 0.5% higher for the week at $1,929, while silver is 1.2% higher at $23.06. If maintained, both will end their 2-week losing streaks. Next week, investors will look to inflation news, Fed Beige Book Data and other economic data for clues as to the next round of rate hikes.

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