Spot gold slipped about $6 (-0.5%) Friday morning to $1,292/oz. Spot silver was down 4¢ (-0.2%) to $16.36/oz.
Platinum dipped $2 (-0.2%) to $903/oz yet palladium actually rose $4 (+0.4%) in early trading to $986/oz.
Markets Rally on Strong May Jobs Report
The much-anticipated nonfarm payrolls (NFP) beat expectations handily this month. Payrolls rose by 223,000 after forecasts were for less than 200,000 jobs added.
Hourly earnings for workers were up 2.7% year-on-year, as well.
The strong data helped stocks in the U.S. open sharply higher while demand for bonds eased considerably. The 10-year Treasury note saw its yield rise five basis points to 2.90%.
Wall St slumped Thursday on renewed trade war fears. Blue-chip shares lost the most as the Dow Jones fell 1.0%.
Movement in the forex market has been more muted to close out the week. The DXY dollar index rebounded 0.25% to 94.4.
The Japanese yen tumbled 0.75% to ¥109.65 and the euro lost 0.2%, but the British pound was steady above $1.33.
Once markets digest the NFP report, we'll have a clearer picture of how much international trade will factor into investor sentiment.
Even U.S. allies like Canada, Mexico, and Europe are preparing retaliatory tariffs against U.S. exports. The EU is even filing a formal complaint against Washington with the World Trade Organization (WTO).
Trade disputes and geopolitical tensions drove up physical demand for gold this month. The U.S. Mint's American Gold Eagle coin sales were up sharply in May despite major outflows from the second-largest gold exchange-traded fund (ETF).
Similarly, central banks upped their purchases of gold by 42% year-on-year during the first quarter.
In China, the price of gold on the Shanghai Gold Exchange is currently 268.5 yuan per gram, which translates to $1,300.60 per troy ounce. Imports of gold through Hong Kong are currently up 48% year-on-year.
European Stocks, Bonds Recover from Panicked Week
A more risk-on attitude also pervaded the other side of the Atlantic on Friday.
The political situation seems to be stabilizing: Italy's two leading populist parties appear to be compromising on forming a new government after reaching an impasse earlier this week.
Meanwhile, Spain ousted its prime minister after a no-confidence vote in the country's parliament. Although a conservative party in power is being replaced by a socialist one, the added clarity boosted investor confidence for the moment.
Accordingly, equity markets in Europe rebounded about 1.5% on the continent and 0.7% in London.
Most Asian indices were about unchanged overnight, although the Shanghai Composite index dropped by 0.85%.
Back in the U.S., the strong payrolls report is expected to give the Fed more cause to continue raising interest rates. Many analysts believe the central bank could hike rates three more times this year.
The outlook for manufacturing also improved this month, according to data from the Institute for Supply Management (ISM).
Commodities were off in general. There's some speculation that the alliance between OPEC and Russia in the global oil trade could be fracturing. As prices have risen, production cuts have caused the group to lose market share.
Crude prices staged a modest comeback around midweek but remain well off their recent highs.
For the month of April, Brent crude is up over 3%. However, the WTI benchmark actually lost more than 2% in May, creating a wider spread.
WTI crude was down 0.9% to $66.45/bbl on Friday while Brent was off 0.6% to just above $77/bbl.
By comparison, the September crude contract that trades in Shanghai last settled at 470.5 yuan per barrel, or the equivalent of $73.28/bbl.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.