Gold News

Gold and Silver Leap as US Jobs Market Weakens, Services Sector Shrinks

GOLD and SILVER leapt against a falling Dollar on Wednesday as new data showed the US labor market weakening while activity across the services sector has suddenly begun shrinking.
Western stock markets also rose sharply while government bond yields tumbled across Europe as well as on US Treasury debt, pulling Washington's 10-year borrowing costs down to 1-week lows at 4.34% per annum.
Dollar gold prices rose above $2360 per Troy ounce, up 1.4% for the week so far, while silver touched $30.67 for a 4.4% jump.
Both precious metals also rose to near-2-week highs for Euro and British investors ahead of tomorrow's UK General Election and the weekend's final round of voting for France's parliament.
Chart of gold in Euros. Source: BullionVault
Forecasting "political turbulence in France," Swiss bank and global bullion market maker UBS says "we expect market volatility to continue in the lead up to the US presidential election in November.
"We see gold as an attractive geopolitical hedge and portfolio diversifier, and rate the metal as most preferred."
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June's net US jobs growth on the private-sector ADP Payrolls estimate today missed analysts' consensus forecasts by more than 6% with the weakest reading since January.
Claims for US jobless benefits meantime came in higher on the latest weekly data, with continuing claims jumping to the most since November 2021 and initial claims rising back towards early June's 10-month peak.
Employment in the services sector fell for the 5th month running, the ISM PMI report then added for June, with overall activity tumbling with its sharpest contraction since May 2020, depths of the first-wave Covid Crash.
Having contracted only once between June 2020 and March this year, and showing record-strong growth in late-2021, the ISM services PMI has now fallen below 50 twice in 3 months.
"[These] US numbers are gold friendly," says bullion-market specialist Rhona O'Connell at brokerage StoneX.
"All eyes now on the [government's estimate of] Non-Farm Payrolls on Friday."
Ahead of today's softer US data whacking interest-rate forecasts lower, the S&P500 index of US corporate stocks ended last night with its 32nd new record close of 2024 to date, rising through 5,500 for a gain of 16.1% from New Year.
Gold priced in Dollars has risen 13.9%, silver 27.4%.
The UK gold price in Pounds today rose to £1850 ahead of Thursday's election, universally expected to deliver a landslide victory for the left-leaning opposition Labour Party.
Gold in Euros reached €2185 after Eurozone inflation on June's first estimate slowed as analysts expected to 2.5% per year on the headline measure, but core inflation – excluding fuel and food – held at 2.9%.
Region-wide activity in the services sector meantime continued to grow on the HCOB PMI survey despite France remaining in contraction as Germany's boom eased back. 

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver, platinum and palladium 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.

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