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Gold futures dropped sharply Friday morning after a U.S. report on November employment came in better-than-expected, with gains last month of 266,000 new jobs, marking the biggest monthly gains since January and reaffirming the health of the domestic economy.
February gold GCG20, -1.11% on Comex fell $15.30, or 1,1%, at $1,466.90 an ounce, after a 0.2% gain on Thursday. March silver SIH20, -2.40% gave up 27 cents, or 1.6%, at $16.790 an ounce, following a 0.9% gain the prior session.
For the week, gold prices are set for a decline of 0.4%, while silver is on track for a weekly decline of 2.1%.
Read: ‘Don’t fall asleep on gold’ as it gears up for another run, says prominent analyst
The increase in new jobs easily topped the 180,000 MarketWatch forecast, helped by the end of the General Motors GM, +0.91% autoworkers strike which added roughly 50,000 jobs to the payrolls number. The unemployment rate slipped to 3.5% from 3.6% and matched a 50-year low.
The average wage paid to American workers rose 7 cents, or 0.2%, to $28.29 an hour. The 12-month rate of hourly wage gains slipped to 3.1% from 3.2%. Hours worked each week were flat at 34.4 hours. The government revised the increase in new jobs in October to 156,000 from 128,000. September’s gain was raised to 193,000 from 180,000.
See MarketWatch’s Economic Calendar.
The data undercuts, in the immediate term, demand for haven gold and has helped to provide a jolt to a stocks, with the Dow Jones Industrial Average DJIA, +0.98%, the S&P 500 index SPX, +0.83% and the Nasdaq Composite Index COMP, +0.86% were aiming to cut away at a weekly decline in Friday trade.
Bullion and other precious metals, however, have been mostly influenced by the latest in trade developments, with remarks from President Donald Trump earlier in the week raising the possibility that a trade resolution to end a nearly yearlong tariff dispute between China and the U.S. could be kicked into next year.
On Friday, China’s State Council began the process of exempting some soybeans and pork imported from the U.S. from punitive tariffs, the state-run Xinhua News Agency said, helping to reignite optimism around a partial deal coming to fruition.
“Gold will continue to get knocked around by the trade headline. So, trading has become a function of the fastest trigger in town and wholly driven by trade talk headline risk,” wrote Stephen Innes, chief Asia market strategist at AxiTrader, in a daily research note.
Jim Wyckoff, senior analyst at Kitco.com, told MarketWatch that the report delivered a bearish tone for gold bulls and provides little incentive for the Federal Reserve to deliver another interest rate cut in coming months.
“This report falls squarely into the camp of monetary-policy hawks who don’t want to see rates fall any more,” he said.
January platinum PLF20, -0.71% declined 0.6% to $895.60 an ounce, while March palladium PAH20, +0.16% added 0.2% to $1,849.50 an ounce.
March copper HGH20, +1.31% headed 1.2% to $2.696 a pound.
