Gold futures traded moderately lower, retreating to a new session low Friday after a stronger-than-expected October jobs report.
Gold for December delivery GCZ8, -0.31% was off $4.50, or 0.4%, to $1,234.10 an ounce. Gold on Thursday settled at a three-month high, up 1.9% as the U.S. dollar weakened. A weaker U.S. unit can be a boon for commodities priced in the currency as it makes them less expensive to users of other currencies.
December silver SIZ8, -0.18% meanwhile, edged up by 2.8 cents, or 0.2%, to $14.805 an ounce, extending its rally from a day earlier. Upbeat economic data can provide a boost for industrials metals, including silver.
The U.S. economy added 250,000 new jobs in October, topping the consensus forecast of 208,000, while the unemployment rate was unchanged at a 48-year low of 3.7%. Average hourly earnings saw 12-month growth accelerate to 3.1% from 2.8% in September.
Analysts had warned that a strong October jobs report could weigh on gold as it would underline expectations the Federal Reserve will continue to raise interest rates at a steady pace, lifting Treasury yields and the dollar. Higher bond yields can also be a headwind for gold and other commodities since the latter doesn’t offer an income stream.
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +2.25% was up 4.3 basis points at 3.182%, though the ICE U.S. Dollar Index DXY, +0.23% which measures the currency against a basket of six major rivals, was little changed at 96.288.
Analysts were also discussing Wednesday’s third-quarter update on demand trends from the World Gold Council, which showed strong central bank purchases and increases in consumer appetite but growing supply and weak investment flows.
Christopher Louney, analyst at RBC Capital Markets, noted that October, the first full month of the fourth quarter, saw a recovery in physically backed gold holdings by exchange-traded products, which rose by more than 20 tons overall.
On Friday, however, the SPDR Gold Shares ETF GLD, -0.01% added 0.1%, looking to end the week nearly flat.
“With such uncertainty around the mid-terms on Tuesday” and the Fed’s monetary-policy meeting next week, “gold is taking a pause after its best winning streak since January,” up four weeks running based on the Friday PM London benchmark, said Adrian Ash, director of research at BullionVault.
“But the more significant event for prices next week might be Diwali in India,” he said. “Now the metal’s No. 2 consumer nation is reaching its peak demand season with prices near six-year highs (thanks to the sinking Rupee). That’s badly hurting gifting and investing among the world’s wiliest gold-buying households.”
In other metals trade, January platinum PLF9, +1.25% rose 1.1% to $872.30 an ounce, while December palladium PAZ8, +1.55% gained 1.7% to $1,100.40 an ounce. December copper prices HGZ8, +2.98% jumped 3.1% to $2.805 a pound.
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