Gold News

Gold & Silver "Robust", Strength "Underlined" by Swift Recovery from US Jobs Data

GOLD and SILVER held flat Friday morning in London, trading slightly higher from last week's finish as European stock markets recovered earlier losses.
 
With New York closed for Independence Day, quiet trading saw Germany's Dax head 2% higher for the week to new all-time highs.
 
Gold and silver headed for their highest weekly finishes since mid-March above $1320 and $20 per ounce respectively.
 
Thursday's "highly anticipated US Non-farm Payrolls didn't disappoint," says one Asian gold and silver dealing desk.
 
But the "sharp recovery" after those figures – the strongest US jobs addition since 2012 – "underlines the current strength in demand for gold."
 
"We interpret [gold's recovery] as a sign of relative strength," agree analysts at Commerzbank in Frankfurt.
 
But "the market had a bearish tinge on the better macro data coming out of the US and China," counters Citigroup analyst David Wilson, quoted by Bloomberg.
 
Friday's weak German factory orders – reported 1.7% below April – "may have modestly dented some of that macro optimism," he says, spurring strength in gold.
 
Silver "swiftly rebounded" after Thursday's US jobs data, adds the commodities team at Deutsche Bank – which today sold its trading book in coal, iron ore and freight to investment bank Morgan Stanley.
 
"Hence we still see silver as robust and adhere to a bullish objective at $21.92 to $21.99," it said.
 
"The real test for gold," reckons London bullion market-maker HSBC, "may be the return of market participants following the [Fourth July] holiday."
 
"Liquidity is again thin today," Reuters quotes a Tokyo trader, "because of the US holiday.
 
"But when we see bigger volumes from Monday, gold will resume its decline as long positions are unwound."
 
Today's holiday delays the latest data from US regulators on hedge-fund and industry positions in gold and silver derivatives until Monday.
 
Last week's figures saw the 2nd sharpest jump in speculative bullish bets, net of bearish contracts, on record.

Adrian Ash is director of research at BullionVault, the physical gold and silver 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 is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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