Gold price pops after much weaker-than-expected U.S. jobs report

  • 05/07/2021
  • Source: Kitco
  • by: Jim Wyckoff
Gold price pops after much weaker-than-expected U.S. jobs report
(Kitco News) - Gold and silver prices are higher in early morning U.S. trading Friday and hit 10- and 9-week highs, respectively. The metals got a booster shot after a very downbeat U.S. jobs report was just released. The U.S. dollar index and U.S. Treasury yields have backed down late this week and those are also bullish elements for the precious metals markets. The near-term technical postures for both metals have improved markedly this week, which is inviting the shorter-term futures traders to the long side of the gold and silver markets. June gold futures were last up $21.90 at $1,837.50 and July Comex silver was last up $0.188 at $27.67 an ounce.

The key U.S. data point of the week and arguably of the month was just released as the Labor Department's Employment Situation Report for April showed a paltry non-farm payrolls rise of 266,000. Forecasts were for a 1 million rise compared to a rise of 916,000 in March. The unemployment rate came in at 6.1% versus 6.0% in March. The March non-farm payrolls number was also revised down to 770,000. This report at least temporarily throws some cold water on notions the Federal Reserve may be forced to raise interest rates much sooner than many expected.

Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Trader and investor appetite remains mostly upbeat late this week. However, traders have taken note of comments from Fed Governor Lael Brainard Thursday, who said in a report that rising appetite for risk across a variety of asset markets is stretching valuations and creating peril in the U.S. financial system. "Vulnerabilities associated with elevated risk appetite are rising,"  she said. The combination of stretched valuations with very high levels of corporate indebtedness may prompt a major "re-pricing event," she said. Some market watchers are already musing about a hawkish Fed stance at the Jackson Hole, Wyoming annual Fed confab in August.

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