Gold Eyes Weekly Gains Despite Payroll Surprise


Monday marked the start of August trading and the third consecutive day of gold gains. Gold started the week at $1,762 an ounce and would reach one-month highs of $1,772 on Monday, as the dollar index slid lower. As a result, Silver saw mild gains on Monday, ending the day near $20.30. 

While precious metals enjoyed Monday gains, major U.S. equities snapped their winning streaks with modest losses, as investors braced for earnings and economic data throughout the week. With the U.S entering a technical recession in July, Fed speak, and employment data drove investor sentiment as the week progressed. 

Risk aversion drove metals higher for the fourth consecutive session on Tuesday, as investors measured Beijing’s reaction to U.S. House Speaker Nancy Pelosi’s visit to Taiwan. U.S.-China tensions along with comments from St. Louis Fed President James Bullard drove caution on Wall Street Tuesday. Bullard’s comments underscored the likelihood for more interest rate hikes in the coming months. Most notably, the Dow Jones Industrial Average fell by 1.3%. 

The prospect of higher interest rates drove the dollar index higher on Wednesday, which pressured bullion to the downside. On the other hand, geopolitical tensions boosted metal appeal. The result was little change in the price of gold for Wednesday, as the yellow metal hovered near $1,768. Meanwhile, silver ended the day slightly higher, at $20.11 an ounce. 

Stocks rallied on Wednesday amid an unexpected rise in July service sector orders, which ended four previous months of declines in that sector, according to the Institute of Supply Management. The Commerce Department also released data on Wednesday, which outlined an unexpected rise in June factory orders. 

Following this news, The Nasdaq Composite rose by 2.6% while the S&P 500 gained 1.7%. The dollar rally paused on Thursday, ahead of Friday’s scheduled release of Nonfarm payroll and unemployment data. Treasury yields also slipped as Thursday’s jobless claims met expectations of 260,000. 

Both developments drove gold back near one-month highs of $1,794 and silver 1.1% higher, to a closing price of $20.23. Precious metals were eying three straight weeks of gains, when this morning’s employment data revealed a shocking monthly rise of 528,000 payrolls vs. estimates that were closer to 260,000. 

Stocks opened lower but have pared losses following this morning’s payroll surprise. Meanwhile, gold and silver dipped by over 1% and 2% respectively. Currently, gold is at $1,776 an ounce, which would be a 0.80% weekly gain. As this is written, silver near $19.94, which would be a 1.4% weekly decline. 

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