Gold spent the week struggling to attain the $1,900 mark. The commodity struggled to post gains for the week despite the NFP (Non-Farm Payroll) report boosting its performance at the start of the New York trading session on Friday.
The NFP report helped gold crawl out of the near mid-$1,800 levels it fell to on Thursday, where it posted a daily loss of 1.92% to trade as low as $1,860. Even with the help of the NFP report, Gold was stopped just shy of attempting to return to the $1,900 trading range, which would have bolstered the confidence of bullish gold investors going into the new week.
What happened to Gold?
Gold tumbled from its $1,900 mark on Thursday after data showing weekly U.S. employment claims at the lowest since the outbreak of the coronavirus pandemic in mid-March 2020. The suggestion of a marked improvement in the labour market sent gold’s rivals U.S. bond yields and the dollar surging instead as the commodity tumbled to a Thursday low of $1,865.49.
Less than 24 hours later, the U.S. jobs picture was looking entirely different. The Labour Department’s non-farm payrolls for all of May showed that the United States added 559,000 new jobs in May and the unemployment rate fell to 5.8%. But economists expressed disappointment with the total jobs growth for last month that came in some 115,00 less than forecasts, showing recovery still had a long way to go.
Despite the negative weekly performance of Gold, some analysts, however, remained bullish on the commodity. Ed Moya, an analyst at online trading platform, OANDA, stated, “The move in real yields crushed gold prices for most of the week. But the May nonfarm payroll report showed markets that the April report was not a fluke.”
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Ed Moya said any Fed tightening of rates or so-called tapering of asset purchases will likely wait until the end of the annual summer Fed convention at Jackson Hole, Wyoming. He also added, “Much of the bearish positioning before the nonfarm miss should be undone as the Fed will be seen nowhere ready to talk about tapering.”
Gold is trading at $1,894.05 per ounce, up 1.11% representing a daily close on Friday, after an intraday peak at $1,896.19 for the day. This close represents a 0.59% decline in weekly performance.