Haven metal settles short of $1,300, up a dime for the week
Haven gold climbed by 1% on Friday to notch a slight gain for the week, boosted by losses in global stock markets on the heels of weak Chinese export and U.S. jobs data.
April gold GCJ9, +0.97% added $13.20, or 1%, to settle at $1,299.30 an ounce after briefly trading as high as $1,301.30. After a back-and-forth week, including the lowest settlement on Tuesday since late January, prices for the most-active contract were up 10 cents from the week-ago finish, FactSet data show.
May silver SIK9, +2.13% rose 30.9 cents, or 2.1%, to $15.349 an ounce, for a 0.6% weekly climb.
Gold was “clearly reacting to the jobs numbers, but this is too obvious,” said Jeff Wright, executive vice president of GoldMining Inc. “In my opinion, gold is responding to the weekly downtrend in the U.S. equity markets along with U.S. dollar weakness [Friday] across the major currencies.”
The Dow Jones Industrial Average DJIA, -0.09% was sharply lower after the Friday U.S. employment report showed the weakest job creation in 17 months, with only 20,000 new names added to February payrolls.
The weak February jobs report gives the U.S. Federal Reserve even more reason to be patient about interest rate adjustments and will keep the central bank on hold until at least its September meeting, economists said Friday.
The U.S. had been adding more than 200,000 new jobs a month for the past year. Details within the report, including wages, were more upbeat.
“Many are already speculating the low March jobs reading will be revised significantly upward. Also, the ‘internals’ of this month’s jobs report are not that bad,” said Jim Wyckoff, senior analyst with metals firm Kitco. He said the next target for bulls is a close back above the psychologically significant $1,300 line, which marks resistance to any climb so far.
A down day in stocks and the related boost to haven gold had already been established by weakness abroad. Tumbling 4.4%, Chinese stocks logged their worst one-day percentage drop since October on Friday, after the nation reported a 20% drop in February exports on the heels of a 9.1% gain in January.
China’s news added to concerns about global growth. Investors were still reeling from a more dovish-than-expected European Central Bank, which announced new measures to support a slowing economy on Thursday. That included fresh long-term loans to European financial institutions and a surprise pledge to hold off on any interest-rate increases until at least the end of the year. Other data on Friday showed German manufacturing orders fell sharply in January, though December data was raised.
The euro EURUSD, +0.3752% fell to four-month lows Thursday after the ECB said its ultralow interest rates wouldn’t rise at least until late 2019. Weakness in the currency led to a stronger U.S. dollar, but the dollar index DXY, -0.24% was lower on Friday, adding to the boost for gold.
Finally, uncertainty was lingering over a U.S.-China trade deal, a boost to precious metals. Washington and Beijing have yet to set a date for a summit to resolve their trade dispute, the U.S. ambassador to China, Terry Branstad, said in an interview with The Wall Street Journal.
Looking ahead to next week, Wright said it’s “important to look at the weak jobs numbers in context along with retail sales on Monday and durable goods on Wednesday. We also have inflation readings with CPI and PPI which all together should determine if today is a ‘fluke’, as some are suggesting, or part of a larger mosaic of a true slowdown in economic growth in the U.S.” See the economic calendar.
Among other metals Friday, May copper HGK9, -0.38% fell 0.6% at $2.894 a pound, ending 1.3% lower on the week. Worries about an economic slowdown in China weighed on demand prospects for the industrial metal.
April platinum PLJ9, +0.17% added less than 0.1% to $817.60 an ounce, ending down 5.3% for the week, while June palladium PAM9, -0.76% lost 1.6% to $1,459 an ounce, down 3.1% for the week.
Gold-backed exchange-traded fund SPDR Gold Shares GLD, +1.09% added 0.8% to turn higher for the week.