The big story driving markets on Friday was this morning's nonfarm payrolls for the month of July, which came in well above expectations. This helped the dollar, pushing spot gold significantly lower by about $13 per ounce, as the yellow metal held above $1,254/oz in early trading. Spot silver lost a whopping 45¢ (-2.70%) to fall well below where it opened on Thursday, trading right at $16.20/oz.
Before breaking down the payrolls data, here's a glance at Thursday's closing numbers:
Gold: $1,267.90/oz (+$1.70, +0.13%) Silver: $16.65/oz (+9¢, +0.57%) Platinum: $962/oz (+$17, +1.80%) Palladium: $872/oz (-$12, -1.36%)
The nonfarm payrolls report from the Labor Department came in far above expectations, with 209,000 new jobs added last month. Expectations called for a number closer to 180,000. Wages also ticked higher by 0.3% over June, or 2.5% higher year-on-year. This was considered relatively sluggish all the same. June's data was revised sharply higher in the report, as well.
This brought the "official" unemployment rate to a 16-year low of 4.3%. At the same time, it's worth noting that the more inclusive U6 unemployment figure remained at 8.6%, twice as high as the U3 rate that is touted in headlines. The U6 measurement includes discouraged workers who don't have a job and may not be actively looking, either.
The relatively encouraging nonfarm employment data helped boost the beleaguered dollar. The USD rose 0.7% on the DXY index, picking up a bit of ground on the euro. Stocks in the U.S. opened about 0.2% higher in the first hour of trading in New York, although the markets have shown a general trend of slipping back into the red late in the session. This continued on Friday. Still, all three major indices (the Dow Jones, made up of the 30 largest U.S. companies; the Nasdaq, largely comprised of tech and healthcare stocks; and the S&P 500, which covers the broader markets) are threatening new all-time highs.
It's worth noting that the World Gold Council recently reported that investment demand for gold (i.e. purchases of gold coins and gold bars) rose 13% year-on-year during the second quarter. This was largely driven by higher buying in India ahead of the implementation of a new goods and services tax that is expected to hit gold dealers and consumers especially hard. Despite the optimistic NFP report dragging gold prices down sharply on Friday, the outlook for gold demand looks steady.
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