Gold Up as Nonfarm Payrolls Disappoint | August 3, 2018
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Gold Up as Nonfarm Payrolls Disappoint

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Gold Up as Nonfarm Payrolls Disappoint

Gold, silver, and the Platinum Group Metals benefited from a weaker dollar Friday, rebounding from earlier losses.

Spot gold gained $7 (+0.6%) to poke back above $1,214/oz.

The silver price was up 15¢ (+1.0%) to $15.43/oz.

Platinum rallied 1.3% and palladium inched about 0.3% higher.

July NFP Fail to Impress

The nonfarm payrolls (often abbreviated as NFP) for last month were released by the Department of Labor on Friday morning. The big jobs report disappointed investors, missing sharply to the downside.

Private-sector payrolls added 157,000 jobs in July, falling well short of forecasts in the 190,000 to 195,000 range.

However, the numbers for May and June were each revised higher.

The unemployment rate dipped back to 3.9% during the month, which was in line with expectations. One main takeaway from the NFP was that there continues to be a shortage of workers, especially in the construction and manufacturing sectors.

Despite the tighter labor market—usually a source of upward pressure on wages—wage growth was flat at 2.7% in July.

The initial reaction on Wall St was muted. U.S. stocks were basically flat at the opening bell and the dollar was down modestly.

Traders Worried About Trade

Even after slipping lower, the USD still held above 95.1 on the DXY index. The euro fell to just $1.157, approaching its lows from May and June.

Nonetheless, European indices posted modest gains in early trading. Shares rose 0.75% in London.

Britain's pound sterling briefly dropped below $1.30 before clawing back a bit of its losses.

The bond market absorbed some fresh demand as sovereign debt yields fell across the developed world. The yield on the 10-year Treasury shed two basis points to 2.97%.

Overall, investors in the stock markets have been hesitant to make any major moves amid the increasingly ubiquitous effects of the trade war.

Thus far, China continues to characterize its retaliation to U.S. tariffs as "rational and restrained" compared to the approach of the Trump administration.

Asian equities were mostly lower overnight. Japanese markets were off slightly while shares closed 1.65% lower in Shanghai.

In the meantime, the market capitalization of Apple, Inc. exceeded $1 trillion after a record-high close yesterday, marking the first company ever to reach this milestone.

From a broader perspective, however, the U.S. trade deficit remained close to a 10-year high in July, climbing 7% during the month.

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.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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