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Gold & Other Precious Metals Rally on NFP, Fed Policy Outlook

Summary:
Gold and other precious metals rallied today, with prices for bullion reaching the highest level in more than a year before pulling back by the session’s close. The main reason for the rally was surprisingly bad US jobs data. Nonfarm payrolls showed that employment rose by just 75,000 in May, much less than analysts had predicted — 177,000. Furthermore, wage inflation stayed at 0.2%, whereas experts had promised an increase to 0.3%. Gold rallied also on speculations that the Federal Reserve will have to cut interest rates this year. The poor employment data added fuel to such talks. At the present time, the CME FedWatch page shows about 95% probability of a cut by September 2019. Furthermore, it shows almost 50% probability of a cut by a half of percentage point. The spat between

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Gold and other precious metals rallied today, with prices for bullion reaching the highest level in more than a year before pulling back by the session’s close. The main reason for the rally was surprisingly bad US jobs data. Nonfarm payrolls showed that employment rose by just 75,000 in May, much less than analysts had predicted — 177,000. Furthermore, wage inflation stayed at 0.2%, whereas experts had promised an increase to 0.3%.

Gold rallied also on speculations that the Federal Reserve will have to cut interest rates this year. The poor employment data added fuel to such talks. At the present time, the CME FedWatch page shows about 95% probability of a cut by September 2019. Furthermore, it shows almost 50% probability of a cut by a half of percentage point.

The spat between the United States and Mexico provided another reason for investors to buy precious metals. While Mexico promised to take measures for decreasing the flow of illegal migrants to the USA, it looks like that such actions will not be enough to prevent the USA from imposing tariffs on Mexican goods.

Futures for delivery of gold in August gained 0.16% to $1,344.9 per troy ounce as of 21:46 GMT on COMEX today. Silver for delivery in July advanced 0.7% to $15.01 per ounce. Spot price for platinum was up 0.28% to $807.05 per ounce, while palladium rallied 0.5% to $1,360.23 per ounce.


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Vladimir Vyun
Vladimir is an online journalist with background in computer science and work experience in pension funds. He contributes news reports, fundamental analysis and sentiment forecasts to TopForexNews.com and CommodityBlog.com. His main specialization is the currencies of emerging economies and inter-market correlations with commodity and bond trading.

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