By Price Action
Gold prices showed a slight increase on Friday as traders eagerly anticipated the release of the U.S. Department of Labor’s June jobs report.
- Gold futures for August delivery (GC00, +0.39% GCQ23, +0.39%) rose $7.70, or 0.4%, to $1,923 per ounce on Comex. According to Dow Jones Market Data, this marked the futures contract’s lowest level since March 14.
- Silver futures for September delivery (SI00, +0.07% SIU23, +0.07%) remained relatively stable at $22.86 per ounce.
- Palladium futures for September (PAU23, -0.31%) experienced a slight decline of $6.40, or 0.5%, to $1,233 per ounce. Meanwhile, October platinum (PLV23, +0.34%) saw a minor increase of 80 cents, or 0.1%, to $910 per ounce.
- Copper futures for September delivery (HGU23, +0.59%) exhibited a gain of 2 cents, or 0.6%, to $3.76 per pound.
Market drivers
Gold prices saw a significant drop on Thursday, reaching their lowest level since March. This decline came after the release of the ADP survey on private sector U.S. employment, which indicated that nearly half a million new jobs were created in June. The strong job creation figure suggested that the economy was robust enough to support another interest rate hike by the Federal Reserve in July, aimed at combating inflation.
This data had a profound impact on the markets. U.S. stocks faced a downward slide, while Treasury yields reached their highest point in three months. The increase in Treasury yields and the strength of the dollar both contributed to the decline in gold prices.
Despite the pressure caused by the ADP report, gold managed to hold above the $1,900 mark and even recoup some of its losses. Today, it is trading slightly higher. However, whether gold can sustain these gains and remain above $1,900 will largely depend on the upcoming jobs report.
Craig Erlam, senior market analyst at OANDA, commented, “Gold came under pressure in the aftermath of yesterday’s ADP report but managed to hold above $1,900 and even recoup some of its losses.It’s trading marginally higher today but whether it will be able to hold onto those gains, and remain above $1,900, will probably depend on what kind of jobs report we get.”
Job Growth Expected to Slow in June
According to a survey conducted by the Wall Street Journal, economists anticipate that the U.S. Labor Department will report approximately 240,000 new jobs for the month of June. Although this figure represents a decrease from the previous month’s total of 339,000, it encompasses both private sector and government employment. This report will provide valuable insights into the current state of the job market and its trajectory. Stay tuned for more detailed analysis in the coming days.
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