New U.S. Jobs Report Rattles Gold Prices

APMEX

2/1/2019 1:47:09 PM

Daily Gold & Silver Market Report – 2/1/2019

• Exceptional jobs report challenges Gold prices. 
• Former presidential candidate could become Federal Reserve Board nominee.
• Gold acquisition by central banks rose substantially in 2018.

Following a better-than-anticipated U.S. employment report, Gold prices dipped slightly. The new data show signs of a robust and active labor market, leading many investors to pause their acquisition of safe-haven investments. The U.S. Department of Labor stated 304,000 new jobs were added in January, well above forecasts. Gold futures for April delivery declined 90 cents, according to an article published by MarketWatch. As of 10:15 a.m. (ET), the spot price of Gold was down to $1,320.90 per troy ounce. Silver prices also dragged, trading at $16.07.

Last month, the price of Gold gained approximately 3 percent, ushering in a fourth-consecutive month of gains. Analysts have suggested indications of more cautious interest rate hikes from the Fed helped support the Precious Metal. When interest rates are static or declining, Gold often benefits, drawing interest away from yield-bearing assets. Trey Reik, a senior portfolio manager for Sprott Asset Management, is quoted saying, “History overwhelmingly suggests the Fed will be easing policy within three to six months. Once this inflection in Fed policy officially hits the tape, gold should have already commenced what we expect to be a significant and sustained advance.”

Herman Cain Possible Nominee for Fed Board

The Federal Reserve Board has an open seat and a former presidential candidate is among the possible nominees. CBS News reports Herman Cain, who campaigned for the Republican nomination for U.S. president in 2012, among the contenders. The statement of his potential appointment came from National Economic Council Director Larry Kudlow. Cain garnered attention during his presidential push for an economic plan he dubbed the “9-9-9 Plan,” which called for replacing the U.S. tax code with 9 percent business, income and sales tax rates throughout the country. The monetary policy set forth by the Fed, which serves as the central bank of the United States, has a great deal of influence over the price of Precious Metals such as Silver and Gold.

Total Gold Acquired by Central Banks in 2018 among Highest in History

In terms of volume, central banks from around the globe collectively bought the most Gold on record since 1967. The data comes from the World Gold Council, stating central bank net purchases were up to 651.5 metric tons in 2018, a 74 percent increase from the previous year. CNBC reports the U.S. Federal Reserve has the most Gold holdings in the world. The WGC report stated, “Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets.” Countries making the highest volume of purchases last year include Russia, Turkey, Kazakhstan, India, Iraq, Poland and Hungary.

At 12:46 p.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,320.30 Down $2.90
• Silver, $16.02 Down $0.13
• Platinum, $830.20 Up $4.40
• Palladium, $1,354.70 Up $14.80

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