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Gold Drops Toward Lowest Finish in 2 Months

Gold futures dropped Friday as an unexpected monthly rise in U.S. jobs and a drop in the nation’s unemployment rate rallied the stock market, pushing prices for the haven metal toward their lowest finish in two months.

The U.S. regained 2.5 million jobs in May and the unemployment rate fell to 13.3%, according to the Bureau of Labor Statistics on Friday.

Economists polled by MarketWatch had forecast a loss of 7.25 million jobs. The unemployment rate was forecast to rise to 19% from a post World War Two record of 14.7% in April, though states have been allowing businesses to reopen as the coronavirus pandemic recedes.

“The U.S. unemployment rate has shocked everyone because the number was much lower than the market expectation, said Naeem Aslam, chief market analyst at AvaTrade, in emailed commentary. “This a mind-blowing number and shows that the economy is improving.”

August gold on Comex shed $47, or 2.7%, at $1,680.40 an ounce. A settlement around the current level would be the lowest for a most-active contract since April 3, according to FactSet data.

Meanwhile, July silver lost 56.1 cents, or 3.1%, at $17.50 an ounce, with prices on track to end at their lowest in roughly two weeks.

For the week, gold is down about 3.8%, while silver has lost 5.5% from last Friday’s settlements.

Looking ahead, expect a “return to basics” next week, said George Gero, managing director at RBC Wealth Management. A “global economic recovery, more political and economic headlines in [the] U.S. as elections get closer, Middle East worries, China-U.S. tariffs [concerns and] escalating trade worries,” among other things are likely to support higher gold prices in the coming weeks, he said in emailed commentary.

Elsewhere on Comex, July copper tacked on 2.5% to $2.5505 a pound, with prices for the most-active prices trading more than 5% higher for the week. July platinum fell by 4.5% to $826.10 an ounce, poised for a weekly loss of over 5%, while September palladium traded at $1,949 an ounce, up 1.4% in Friday dealings, paring the week’s loss to around 1.2%.

Source: Marketwatch

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