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Gold prices settled lower on Friday, a day after marking their highest settlement level since August 2020, as a strong April U.S. jobs report fueled fresh doubt that the Federal Reserve will pause further interest-rate hikes.
Price action
-
Gold for June delivery
GC00,
-0.21% GCM23,
-0.21%
fell by $30.90, or 1.5%, to settle at $2,024.80 per ounce on Comex. Prices for the most-active contract, which settled Thursday at the highest since Aug. 6, 2020, ended 1.3% higher for the week, according to Dow Jones Market Data. -
Silver for July
SI00,
-0.10% SIN23,
-0.10%
fell by 30 cents, or 1.1%, to $25.93 per ounce, with prices up 2.8% for the week. -
Palladium for June delivery
PAM23,
-0.68%
gained $45.20, or 3.1%, to $1,486.80 per ounce, with prices registering a weekly fall of 1.5%, while platinum for July delivery
PLN23,
-0.83%
gained $18, or 1.7%, to $1,068.30 per ounce, down 2% for the week. -
Copper for July delivery
HGN23,
-0.08%
rose 2 cents, or 0.5%, to settle at $3.88 per pound, posting a weekly loss of 0.2%.
Market drivers
Gold prices were dragged lower toward the psychologically important $2,000 mark “by the higher-than-expected headline [nonfarm payroll report], coupled with the unemployment rate matching a multidecade low,” Han Tan, chief market analyst at Exinity Group, told MarketWatch.
“This latest evidence of a still-tight labor market is casting fresh doubt on a Fed hike pause, to the chagrin of the zero-yielding precious metal,” he said.
“The April U.S. jobs report is the ‘latest evidence [that] a still-tight labor market is casting fresh doubt on a Fed hike pause, to the chagrin of the zero-yielding precious metal.’ ”
The U.S. created 253,000 new jobs in April and wages rose sharply, the government said Friday. The increase surpassed the 180,000 forecast by economists polled by the Wall Street Journal. The unemployment rate fell to 3.4% from 3.5%.
Gold’s recent rally had been “paved by expectations that U.S. rates have peaked, much to the relief of the zero-yielding asset,” with the safe-haven asset having been bid up by “persistent fears over U.S. banking turmoil, which raises the prospects of a recession,” Tan said.
“The precious metal should remain supported as long as markets refuse to abandon hopes for Fed rate cuts later in 2023, while fears over further U.S. financial turmoil continue casting a pall over risk sentiment,” he said.
Tan said gold “may yet harbor enough reasons to attempt a new record high,” despite the post-nonfarm-payroll pullback in prices, but he noted that because previous spikes above $2,070 were “swiftly unraveled, such price action suggests that bullion isn’t likely to hold after reaching a newfound peak.”
Read: Why gold prices hitting a record-high may be ‘inevitable’ as investors seek havens for shelter
Also read: Silver hit a 1-year high. Here’s why it can keep climbing.
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