Gold News

Gold Price Halves Week's Gain to $20 as US Jobs Data Beats Forecasts

The GOLD PRICE hit 1-month highs against the Dollar on Friday before falling back to show a $20 gain for the week as longer-term interest rates leapt after new data said the US economy added almost twice as many jobs as analysts expected in July.
Non-farm payrolls expanded by 528,000 on the Bureau of Labor Statistics' first estimate, beating forecasts of 250,000 with the strongest growth since February.
Global stock markets fell following the news, pulling the MSCI World Index 0.6% from yesterday's 2-month high.
Reaching towards $1795 per ounce this morning, gold priced in the US Dollar had touched its highest since the steep drop of 5 July, trading virtually unchanged from this time 12 months ago.
But a 0.15 jump in 10-year US Treasury yields to 2.84% per annum after the jobs data saw the gold price dropped back to $1774 in Dollar terms while holding firmer in Sterling at £1475 and Euros at €1746.
"Gold heads for third weekly gain on rising demand for havens," says a headline from Bloomberg.
Gold ETF trust funds, however, shrank again on Thursday, taking world No.2 the iShares IAU product to its smallest in 4 months after 10 weeks of investor outflows, while No.1 gold-backed ETF the SPDR GLD resumed the near 2-month liquidation it paused last week.
Chart of monthly global gold ETF flows. Source: World Gold Council
Gold ETFs as a group worldwide ended July with their 3rd monthly outflows on the run according to data compiled by the mining industry's World Gold Council, shrinking the quantity of bullion needed to back their shares in issue to the smallest since February.
Price-wise, "Gold continues to benefit from a weaker Dollar," Reuters quotes one spread-betting bookmaker's analyst today, "driven by falling US bond yields as markets continue to price in peak inflation and a recession."
US data last week said the world's largest economy has tipped into recession as defined by 2 consecutive calendar quarters of lower output.
Employment in the services sector shrank marginally in July for the 4th of 7 months so far in 2022 on the Institute for Supply Management's PMI survey data, while the manufacturing sector shed jobs for the 3rd month running.
July also saw the US trade deficit in goods fall to its smallest monthly total since November below $100 billion, and US crude oil stockpiles leapt last week, defying analyst forecasts and also suggesting weaker economic demand by reversing the previous week's drawdown.
Last week also saw new claims for US jobless benefits rise towards mid-July's 8-month high, rising over 56% from the new 5-decade low set in mid-March on the government's seasonally-adjusted count of people seeking financial support on losing their job.

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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