Gold weekly recap, June 2 – June 6

Gold futures logged shy gains this week. A plethora of data signaled markets both ways, with the Eurozone unveiling a stimulus plan for the economy, while the US appeared more confident, pushing stocks to record highs. Ukraine was just as troubled, probably even more, ahead of the presidential inauguration on Saturday, but markets shrugged off a potential escalation.

Gold futures for delivery in August closed for $1 252.5 per troy ounce on Friday on the COMEX in New York, recording a daily loss of 0.06% and a weekly gain of about 0.5%. Weekly high and low stood at, respectively, $1 258.2 on Friday and $1 240.2 per troy ounce on Tuesday, which was the lowest close in four months. Last week the contract fell by more than 3.5%.

Meanwhile, silver contracts for July closed at $18.798 per troy ounce, dropping 0.48% for the session, and logging a weekly gain of about 1.5%. Weekly high and low were at, respectively, $19.200 on Friday and $18.710 on Tuesday, pushing a four-year low. Last week silver also dropped more than 3.5%.

“Major players will remain on the sidelines for now. European investors would be putting money into blue-chip equities, while with improving risk sentiment there is even less incentive to invest in gold,” VTB Capital analyst Andrey Kryuchenkov said for Reuters.

US economic outlook

On Friday, the US posted key employment data for May. New nonfarm payrolls stood at 217 000, as predicted, after 288 000 were added in April. Unemployment rate stood same as last month at 6.3%, which is the lowest level since September 2008, beating expectations of a slight increase.

Earlier, on Thursday the weekly jobless claims report for the seven day through May 31 was posted. Initial applications for unemployment benefits increased more than expected to 312 000, after 300 000 were logged for the previous week. Meanwhile, continuing claims for the week ended May 24 were reported at 2.603 million, improving on expectations and on the previous standing.

Previously, ISM reported significantly growing manufacturing and services sectors in the US, boosting sentiment for the worlds top economy.

Next week several reports are due. Retail sales are expected to post a preliminary 0.4% monthly growth for May, after muted 0.1% increase the previous month.

Later next week, on Friday PPI for May will be revealed. Analysts project a 0.3% gain on a monthly basis and 1.9% year-on-year.

Eurozone

On Thursday the European Central Bank revealed the long-awaited interest rate decision. Borrowing costs were moved downwards to 0.15%, which is higher than the forecast 0.10%. Meanwhile, deposit rates were moved to negative territory, and now stand at -0.10%, which means ECB will tax commercial banks for keeping their money in deposit. The measures are aimed at revitalizing the European credit market, in order to breathe life into the economy and spur growth.

Also on Thursday, the Eurozone logged retail sales for April at 0.4% on a monthly basis, beating expectations and improving on the downgraded 0.1% growth from March. Elsewhere, Germany, the Bloc’s top economy, posted slightly growing industrial production in April, after a drop in March.

Previously, the Eurozone posted more disappointing data, with CPI dropping to 0.5%, and GDP at a muted 0.2% quarterly growth, while services PMI logged a slowdown in the sectors expansion.

Next week the Bloc will report on industrial production for April, with expectations of slight improvement. There will also be data on the final member-states readings for CPI for May and Q1 employment in the Eurozone, as well as a trade balance report.

Stocks, SPDR

US stocks continued to score big, closing the week on Wall Street with all-time highs. S&P added 0.46% on Friday and logged more than 1% weekly increase with the record-high close of 1949.44. Nasdaq 100, which excludes financial institutions, also registered the highest close on record at 3794.57, with a daily gain of 0.47% and a weekly growth of more than 1.5%. Dow 30 Industrial was at 16 924.28, also at an all-time high, after a 0.52% daily gain and a total of 1% for the week.

Elsewhere, Dow Jones Euro Stoxx 50, a gauge of European stocks, also scored the highest close of all time, as trading for the week ended. The index stood at 3291.98 after a daily gain of 0.75% and a weekly increase of more than 1.5%.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, remained at 787.08 for a fourth day on Friday. The fund has regained almost 11 tons over the last two weeks, after dropping more than 30 for the previous month, as the US economy scored improving results.

“After the payrolls report, we saw a very delayed reaction in gold, and it was equities that put pressure on,” said for Bloomberg Mike Dragosits, senior commodity strategist at TD Securities in Toronto. “Prices will remain range-bound as there is no big catalyst to push it one way or another.”

Ukraine

Petro Poroshenko, who received 54% of the vote on May 25, was sworn in as President of Ukraine on Saturday. He said he will not seek vengeance against the pro-Russian separatists, and that he is ready to make concessions towards a peaceful resolution of the conflict, but urged all rebels to lay down arms.

“I don’t want war. I don’t want revenge, despite the huge sacrifice of the Ukrainian people,” he said, the BBC reported, adding: “Talking to gangsters and killers is not our path.”

Russian officials said the inauguration speech was of “promising intent”.

“The tension in Russia and Ukraine has eased somewhat post the Ukrainian elections,” said for Reuters Mark Keenan, head of commodities research for Asia at Societe Generale.

However, fighting continued, even as the inauguration was proceeding, some reports say, according to the BBC. Sloviansk and a number of border towns and army bases saw intense battles recently, with the rebels seizing posts and inflicting casualties on Kiev’s troops.