On Friday (May 5), gold futures closed down by $30.90, or 1.50%, at $2,024.80 per ounce. The dip was attributed to the release of strong employment data in the US for April, which fueled fears that the Federal Reserve might increase interest rates, making gold investment less attractive. However, gold ended up 1.3% higher for the week.
Meanwhile, silver futures dropped 29.70 cents, or 1.13%, to $25.93 per ounce, while the platinum contract rose $18, or 1.71%, closing at $1,068.30 per ounce. Palladium futures rose by $45.20, or 3.1%, to settle at $1,486.80 per ounce.
The decline in gold contracts came after the US Department of Labor revealed that nonfarm payrolls rose by 253,000 in April, beating the expected 180,000 jobs despite the slowing US economy and the banking crisis. The unemployment rate also fell to 3.4%, surpassing analysts’ predictions of 3.6%, and hitting its lowest level since 1969. Additionally, inflation rose by 0.5% month-on-month and 4.4% year-on-year, exceeding both monthly and yearly forecasts.
The tight labor market has created uncertainty regarding whether the Federal Reserve will stop raising interest rates. The Fedwatch tool by CMEGroup currently shows a 3.3% chance that the Fed will raise interest rates again at its next meeting in June. The expected interest rate hike would increase the opportunity cost of holding gold, as it is an asset that does not earn interest.
Moreover, the interest rate hike would strengthen the dollar, making gold contracts more expensive for holders of other currencies, further reducing the attractiveness of gold investment.
In summary, the strong employment data in the US for April led to a decline in gold futures, as fears of an impending interest rate hike by the Federal Reserve caused concerns about the attractiveness of gold investment.
The Spot Market is Closed
Saturday May 6, 2023
| Metals Updated at | USD Bid/Ask | Ounce Change | Low/High |
| Gold 04.00 | 2,017.60 2,018.60 | -32.70 -1.59% | 1,998.90 2,054.10 |
| Silver 04.00 | 25.67 25.77 | -0.34 -1.33% | 25.11 26.22 |
| Platinum 04.00 | 1,060.00 1,070.00 | +18.00 +1.73% | 1,034.00 1,071.00 |
| Palladium 04.00 | 1,417.00 1,567.00 | +40.00 +2.90% | 1,366.00 1,582.00 |
| Rhodium 04.00 | 6,600.00 8,600.00 | -200.00 -2.94% | 6,600.00 8,800.00 |