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Weekly Market Reports

Gold Prices Nosedive Following Optimistic Jobs Report

Daily Gold & Silver Market Report – 7/5/2019

  • U.S. economy adds 224,000 jobs in June, more than expected. 
  • Strong economic data sends Gold prices tumbling.
  • Low industrial demand could prevent Silver rally.

Gold prices declined Friday morning after June U.S. jobs data proved to be much better than expected. The promising jobs numbers raised doubt in many investors that the Federal Reserve will indeed lower interest rates in the coming weeks. MarketWatch reports the U.S. dollar also strengthened, further challenging dollar-denominated Precious Metals prices. When dollar values increase, commodities priced in the U.S. currency become more expensive to buyers using other currencies. Spot Gold sank to $1,393.10 at 9:30 a.m. (ET), down from $1,424.67 less than 12 hours before. Leaders at the Fed recently stated they were considering interest rate cuts this year, but planned to monitor events a bit longer before making a firm decision. 

According to the New York Times, 224,000 jobs were added in the U.S. in June, resulting in an unemployment rate of 3.7 percent. These numbers indicate the job market is slowing a bit, but not to the extent many economists predicted. Average earnings went up 6 cents an hour compared to May, further showing a slight rebound. Overall, unemployment is close to a five-decade low, and employers have added jobs for 105 consecutive months. 

While positive economic reports often hinder support for Gold investments, several wildcards are still at play. There is still a lot of uncertainty in the manufacturing sector due to ongoing trade wars between the United States and countries such as China and Mexico. A recent report from the Institute for Supply Management showed the industry continued to struggle last month. Also, if economists determine a recession is in fact underway, the Federal Reserve could still decide to lower interest rates, which could be a major win for Gold prices. 

Low Demand, Large Stockpiles May Prevent Silver Rally

As Gold has garnered a great deal of support in recent weeks, many market watchers have proposed Silver will soon follow. A recent report published by Nasdaq, however, reports low demand, large stockpiles and a sluggish economy are factors that could prevent a Silver rally. “Silver and Gold prices have traditionally moved together, with Silver tending to outperform Gold when the two are rising and fall faster when both are in decline,” the article points out. Recent trade woes have piqued interest in Precious Metals, but analyst Rhona O’Connell observes more than half of Silver consumption is from electronics manufacturing. Unlike Gold, a weakening economy could also lower industrial demand for Silver bullion. Demand for Silver coins and bars has similarly waned since 2013.

At 12:54 p.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,400.70 Down $19.70
  • Silver, $15.07 Down $0.31
  • Platinum, $808.70 Down $32.90
  • Palladium, $1,576.20 Down $1.60

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (ET)! Or call us Fridays until 6 p.m. (ET)! If you have any questions about Precious Metals investing or simply would prefer to place your order by telephone, we are here to help.

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Disclaimer:
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies.

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