Gold continued to slide in Friday trading after a stronger-than-expected U.S. jobs report rallied the dollar and all but crushed hopes for an interest rate cut that had figured to come as early as September.
Gold sunk 2.72% in morning trading, down $64 to trade at $2,312 per ounce on the heels of data from the Bureau of Labor Statistics that showed nonfarm payrolls rose by 272,000 jobs in May, besting April’s downward revision of 165,000 added jobs. The figure also bested Wall Street projections of around 185,000 jobs added.
Silver also tumbled Friday morning, down 5.4% to trade at around $30.
The report also showed average hourly earnings increased in May to 4.1%, a notch higher than April’s increase of 4%. Unemployment also went up last month to 4%, slightly higher than the previous 3.9% figure.
Gold was hit with a couple additional gut punches Friday, as the dollar rose more than half a percent against the yen to 156.775, and data showed that the commodity’s top global customer, China, put the brakes on purchasing gold bullion in May following 18 straight months of snapping up the yellow metal.
Friday’s surprise turn follows a week that had been dominated by a dismal report showing an increase in the number of Americans filing new claims for unemployment benefits and data revealing an underwhelming number of jobs added to payrolls by private employers, among others.
Until the morning’s fresh data, investors pinned their hopes on September to see the first interest rate cut by the Fed, but that now remains in serious doubt.
Federal policymakers meet next week to consider the full range of recent economic data, but with Friday’s developments, they might not be under the same scrutiny or pressure to make adjustments anytime soon or even offer clues as to when any could be expected for the rest of the year.
