Closing Gold & Silver Market Report – 5/9/2013

Brandi Brundidge

5/9/2013 4:03:00 PM

GOLD RETREATS ON POSITIVE JOBS REPORT; CHINA MAY REQUIRE EASING

Gold felt a pullback in price today as the U.S. weekly jobless claims fell to a five year low.  Improved labor conditions tend to put pressure on the yellow metal due to the Federal Reserve’s preservation of a low federal funds rate as compared to the unemployment rate.  If the Fed raises interest rates, the market perceives that as a sign they may also cut back on current monetary policy, which makes Gold shine as a safe haven asset.  "Jobless claims were better than expected, indicative of a recovering U.S. economy, and the dollar is a little bit stronger ... In that kind of environment you would expect gold to come under pressure," Deutsche Bank analyst Daniel Brebner said. 

China’s annual consumer inflation data showed a higher than expected rise in April, while factory prices saw their 14^th consecutive month of decline.  China’s central bank now has to decide if monetary stimulus would create market risks and whether further constrictions could prevent an economic recovery.  "On policy, the priority now is industrial reform to tackle the problem of excess capacity. As such, the focus will be shifted away from macro policy to micro policy. We expect the monetary policy to remain intact this year," said Dongming Xie, China economist at OCBC Bank in China.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,459.70, Down $16.50.
• Silver, $23.79, Down $0.23.
• Platinum, $1.509.00, Up $2.60.
• Palladium, $711.40, Up $11.20.

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