Gold prices plummeted to a four-week low after the US Bureau of Labor Statistics (BLS) revealed that the labor market remained strong, and China halted its purchase of the golden metal. The latest US Nonfarm Payrolls report for May revealed the labor market added more people to the workforce, smashing estimates. The report showed that the US economy added 272,000 jobs in May, surpassing expectations of 185,000 new roles. Despite the strong job growth, the report also indicated an uptick in the Unemployment Rate, while Average Hourly Earnings witnessed a slight increase. This data suggests that the US economy is robust, and the Federal Reserve may delay its first rate cut. The positive job report led to a surge in US Treasury bond yields, with the 10-year bond yield climbing 14 basis points to 4.43%, bolstering the US Dollar. The strong US Dollar, along with the news that China's central bank paused its 18-month bullion buying spree, weighed on the price of gold. The People's Bank of China (PBOC) stopped purchasing gold in May after the metal reached record highs in April and May. China's gold reserves remained constant at 72.80 million troy ounces at the end of May, with the value of these reserves increasing to $170.96 billion from $167.96 billion in April. The pause in China's gold buying spree and the strong US Nonfarm Payroll report have contributed to the decline in gold prices. Market participants are now turning their attention to next week's US inflation data and the Federal Reserve's monetary policy meeting. [63b35e99]
Gold prices dropped 4.5% to under $2,300 after hot nonfarm payrolls data indicated a strong US economy. The nonfarm payrolls for May came in at a hot 272,000, surpassing expectations. The higher jobs number suggests a growing economy, which may influence the Federal Reserve's stance on interest rates. Traders and investors are awaiting upcoming reports on inflation data and the Fed's interest rate decision. The drop in gold prices is attributed to the lack of safe-haven demand. [d6b43c52]
Gold and silver experienced a significant drop last Friday, with gold falling by almost 3.5% and silver by almost 7%. This drop is attributed to four major news announcements: the Bank of Canada cutting rates, the European Central Bank reducing interest rates, the release of better-than-expected US non-farm payrolls data, and the announcement by the People’s Bank of China that it had paused buying gold. These announcements are seen as a coordinated move to prop up the petrodollar system. However, the author believes that this drop is temporary and presents an opportunity to invest in precious metals. [5918f01c]