Gold is trading at 1384.95 adding just under $2.00 this morning. Gold futures fell sharply by more than $30.00 per ounce, for their first weekly loss in
Gold is trading at 1384.95 adding just under $2.00 this morning. Gold futures fell sharply by more than $30.00 per ounce, for their first weekly loss in three while silver futures tumbled more than 4%, after jobs growth data came in slightly better than expected, driving Wall Street stocks higher and pulling investors away from the precious metals. Silver is trading at 21.735 this morning on a negative bias.
ETF investors are remaining out of the markets while hedge fund and money managers are slowly returning to precious metals, keeping them trading on a weak note. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,007.14 tons, as on June 7 while silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 9,988.42 tons, as on June 4. Hedge funds and money managers increased their bullish bets in gold futures by 9,017 contracts to 57,113, their highest level in seven weeks, according to CFTC data.
Investors continued to move from commodities and currencies to equities. European shares closed sharply higher on Friday after the U.S. government’s employment report. US Stocks closed sharply higher Friday as the monthly employment report suggested economic growth is tepid enough for the Federal Reserve to maintain its bond-buying program over the next few months.
Current fundamental facing trades include the Japanese Q1 GDP growth which was revised up to 1.0% Japanese GDP grew 1.0% in Jan-Mar from the previous quarter, revised up from a preliminary estimate, confirming an economic recovery on the back of sweeping government policies. As China’s May trade surplus widens to $20.43 bn China’s trade surplus widened in May to $20.43 bn from $18.16 bn in April, amid weakening trade activity. Exports rose 1.0% YoY in May slower than expectation and April’s growth of 14.7%. Imports fell 0.3% YoY. China’s new leaders face a test of their resolve to forgo short-term stimulus for slower, more-sustainable growth after May trade, inflation and lending data trailed estimates, signaling weaker global and domestic demand.
The market sentiment remains upbeat following the more than expected increase in employment. The gains were however limited on the back of increase in unemployment rate to 7.6% in May 2013 from 7.5% in April 2013 consequent to increase in size of labor force. US Non- farm payroll employment increased by 175,000 jobs in May as against downwardly revised increase of 149,000 jobs in April’13.
Base metals are responding to US manufacturing PMI for May fell to 49 from 50.7 in April and factory orders also came below expectations which pushed copper prices down. However a weaker dollar after ECB kept its interest rates unchanged limited the downside in prices.