Gold futures improved slightly Friday after a mostly weak reading for the March jobs report nicked the dollar index and buttressed already deep losses for stocks.
Gold, now on track for a mild weekly gain, had struggled for direction early Friday, with the haven precious metal failing to catch what had been a usual strong bid when stocks retreat in the wake of fresh U.S.-China trade war jitters, such as those roused late Thursday.
June gold GCM8, +0.28% was last up $3.40, or 0.3%, to $1,332.90 an ounce. The contract is headed for a roughly 0.4% weekly gain as a Chinese holiday on Friday kept trading volume thin. May silver SIK8, +0.40% used both for industrial purposes, and so more sensitive to trade issues, and as a haven financial asset, rose 4 cents, or 0.2%, at $16.40 an ounce after starting Friday trading in the red. It now headed for a roughly 0.8% weekly gain.
The ICE U.S. Dollar Index DXY, -0.12% which measures the greenback against six major rivals, slipped about 0.1% to 90.43 after finishing at a two-week high Thursday. The dollar remains on track for a second week of gains. A weaker dollar can make commodities more attractive to buyers using other currencies.
Government data showed that the U.S. created 103,000 new jobs in March to mark the smallest gain since last fall, although within the tightest labor market in nearly two decades. The unemployment rate remained at a 17-year low of 4.1%. Economists polled by MarketWatch had expected a stronger gain of 170,000 nonfarm jobs.
For inflation watchers, including those interested in gold as an inflation hedge, average wages rose 8 cents, or 0.3%, to $26.82 an hour. The 12-month increase in pay picked up slightly to 2.7% from 2.6%.
“The number which grasped the most attention amidst investor and made an impact on the dollar index is the nonfarm employment change,” said Naeem Aslam, chief market analyst with Think Markets. “It is a big miss and the market reaction is adverse and gold has moved higher on the back of this. Today’s data is not something which Trump will be tweeting about.”
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Later, Federal Reserve Chairman Jerome Powell is expected to defend the central bank’s consensus that a gradual rate hike path this year remains appropriate despite a lot of chatter about the risk of an overheated economy from luminaries like his predecessor, Janet Yellen, and JPMorgan Chase’s James Dimon. Powell, who is set to speak to the Economic Club of Chicago at 1:30 p.m., now has a fresh jobs report to potentially back his easy approach to higher rates.
San Francisco Fed President John Williams, just named to lead the powerful New York Fed, is scheduled to give a speech in Santa Rosa, Calif., at 4 p.m.
As for trade, the White House said in a statement after the market close Thursday that President Trump has asked the U.S. Trade Representative to consider an extra $100 billion in Chinese goods to face tariffs and to identify the products that could be targeted.
The move escalates a tit-for-tat trade battle between the two biggest economies in the world. Just a day ago, stocks moved higher on hopes a full-blown trade war could be averted once negotiations began. The Thursday news helped to send stocks sharply lower so far on Friday, although the market has moved sharply in both directions around recent trade developments. Gold, considered among the globe’s haven assets, can usually find buyers when stocks sell off significantly.
Meanwhile, copper for May delivery HGK8, -0.89% was down 5 cents, or 1.5%, at $3.028 a pound on the Comex division of the New York Mercantile Exchange. Its over 2% gain Thursday marked the industrial metal’s largest daily gain since Feb. 14, when it rose 2.3%. The contract shed 1.7% a day earlier.
In exchange-traded funds, the SPDR Gold Shares ETF GLD, -0.51% fell 0.2%, breaking from gold futures. The iShares Silver Trust SLV, +0.46% fell 0.6%, while the VanEck Vectors Gold Miners GDX, +0.46% fell 0.5%.
Among other metals, July platinum PLN8, +0.14% fell $2.20, or 0.2%, to $913.10 an ounce. June palladium PAM8, +0.56% rose $6.10, or 0.7%, to $906.05 an ounce.
Palladium, key for auto markets, remained on track to end the week down about 5%.
“Last year’s uptrend has reversed and palladium prices are down more than 20% from their January high,” Julius Baer analysts said in a note. “We see them better aligned with a softer global car market and shift our view to neutral.”