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Gold, silver end lower after September jobs report, but post back-to-back weekly gains

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Gold and silver futures ended lower on Friday after the September US jobs report still showed signs of rising inflation, but prices for both metals held their own. earnings for the week.

Prices
  • GCZ22 Gold Futures,
    -1.10%
    for December delivery fell $11.50, or 0.7%, to settle at $1,709.30 an ounce on the Comex. Prices for the most active contract ended up more than 2.2% for the week, according to Dow Jones Market Data.

  • SIZ22 December Silver Futures,
    -2.42%
    fell 41 cents, or 2%, to $20.255 an ounce, with prices still up 6.4% for the week.

  • December palladium PAZ22,
    -3.49%
    fell $84.20, or 3.7%, to $2,191.30 an ounce, but up 0.4% for the week, while January platinum PLF23,
    -0.68%
    fell $3.90, or 0.4%, to $917.90 an ounce, posting a weekly rise of 6.8%.

  • HGF23 copper futures,
    -1.95%
    for December fell 6 cents, or 1.7%, to $3.3865 a pound, for a weekly loss of 0.8%.

What is happening

The United States saw an increase of 263,000 new jobs in September, an all-time high, but the smallest increase in hiring since April 2021, government data showed Friday. Economists polled by the Wall Street Journal had forecast 275,000 new jobs.

Market estimates ranged from 248,000 to 275,000 jobs, so gold was under pressure as some viewed the data as better than expected, Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch.

In a daily market update, Jim Wyckoff, principal analyst at Kitco, also said the details of the report showed the labor market was in better shape than the headline figure suggested, giving the Fed plenty of leeway. to keep raising interest rates without worrying that they might hurt the economy.

The report “showed good internal evidence that does not strongly suggest that the US economy is heading into a recession,” Wyckoff wrote, citing the unemployment rate below 3.5% as an example.

Another data point in the report was average hourly earnings up 5% year-over-year, Wolfpack Capital’s Wright said, so “relative to gold, the data was inflationary.”

Another 75 basis point rate hike is expected in November from the Federal Reserve, “with no indication of a pause in the near future,” he said.

After Friday’s US economic data, dollar and Treasury yields climbed, putting pressure on gold prices.

The ICE US Dollar Index DXY,
+0.44%,
an indicator of the greenback’s strength against a basket of rivals, rose 0.3% to 112.57, while 10-year Treasuries yield TMUBMUSD10Y,
3.889%
added 4.5 basis points to 3.867%.

“My bias is negative on gold at the moment and with rates rising I see no fundamental justification to buy.”


—Jeff Wright, Wolfpack Capital

Also see: What’s in store for natural gas, oil and iron ore in the fourth quarter?

Gold futures still ended the week higher, with “some safe-haven buying,” but that’s unlikely to be a trend that will continue, Wright said. “My bias is negative on gold at the moment and with rates rising I see no fundamental justification to buy.”

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