Gold Ends the Week Broadly Flat After Jobs Report Fails to Inpire

February 8, 2020

New York (Feb 8)  Gold prices rose moderately into the weekend but were still down nearly 1% on the week as the onset of caution across financial markets in the last two days didn’t quite erase the bullishness of the previous three.

By 11:20 AM ET (1620 GMT), gold futures for delivery on the Comex exchange were up less than 0.1% at $1,570.25 a troy ounce, while spot gold was likewise nearly flat at $1,566.83.

Prices for almost all assets have been supported this week by further moves by central banks to add liquidity and loosen policy in response to concerns about the impact of the novel coronavirus on the Chinese economy and consequently the world economy.

The impact of those supportive measures, which have included massive liquidity injections in China, coupled with interest rate cuts in Brazil, Thailand and, on Friday, Russia, has been amplified by a string of economic data from the U.S. which have shown the U.S. economy in decent health. The monthly nonfarm payrolls report confirmed that job growth and labor force participation accelerated in January, sustaining a positive backdrop for domestic consumption, the engine of the U.S. economy.

“Strong job creation and firming wage growth in the January #jobsreport provided reassurance that the record-long economic expansion still has room to run,” Oxford Economics analyst Gregory Daco said via Twitter. He noted that labor force participation, adjusted for the aging of the U.S. population, is now back at the level where it was before the financial crisis started in 2007.

However, the figures weren’t enough to revive risk appetite after a rally that some felt had gone too far, too fast.

U.S. Treasury bonds also gained a bid, with the 10-Year yield falling six basis points to 1.59%, while the two-year yield, more sensitive to expectations of changes to the Federal Reserve’s interest rates, fell four basis points to 1.41%. That level is now comfortably below the current target range for fed funds, which reflects strengthening expectations of lower rates down the line.

Elsewhere, silver futures fell 0.9% to $17.63, while platinum futures rose 0.2% to $969.40 an ounce.

Copper futures lost 1.7% to $2.55 a pound, as a wave of public anger against the Chinese authorities’ handling of the coronavirus dented confidence in a speedy rebound from the outbreak.

Silver Phoenix Twitter                 Silver Phoenix on Facebook