Gold weekly recap, June 30 – July 4

Gold futures were little changed this week, shrugging off a bearish payrolls report from the US. Stocks and the dollar soared again, while SPDR also scored sizable gains.

Gold futures for delivery in August closed for $1 321.3 per troy ounce on Friday on the COMEX in New York, recording a daily gain of 0.05% and a slight weekly increase of about 0.2%. Weekly high and low stood at, respectively, $1 334.9 per ounce on Tuesday, a three-month high, and $1 309.4 per troy ounce on Thursday. Last week the contract was also little changed, at another 0.2% gain.

Meanwhile, silver contracts for September closed at $21.200 per troy ounce, adding 0.30% for the session, and logging a weekly gain of about 0.2%. Weekly high and low were at, respectively, $21.335 on Wednesday, which was also a three-month peak, and $20.820 on Thursday. Last week silver added about 0.6%.

“Gold seems to have found some resilience over the past few weeks and the fact that it managed to shrug off the potential bearish news yesterday from the U.S. job report has lent some support,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said for Bloomberg.

US reports

Key US employment data was revealed this week. Nonfarm payrolls for June increased by 288 000, which is a four-year peak. ADP posted a 281 000 figure on Wednesday, and analysts had earlier suggested a growth of about 210 000. The unemployment rate dropped to 6.1%, which is the lowest rate since September 2008.

Also, ISM posted its non-manufacturing PMI for June, for a reading of 56.0, slightly below expectations and the figure from last month, but standing for a sizable growth in the sector nonetheless. A reading of 50 or higher means expansion of economic activities, and vice versa. The bigger the distance from 50, the greater the pace of contraction or expansion. The services sector accounts for about 80% of US GDP.

Previously, ISM revealed its June manufacturing for the US yesterday, for a slightly worse-than-expected growth, but still standing for a considerable growth for the factory sector.

Stocks, dollar

US stocks logged sizable gains during Thursday’s session, which was the last for the week due to the July 4 holiday. S&P 500 added 0.55% as trading on Wall Street closed for the week, for a record-high close of 1985.44. Dow 30 logged a 0.55% gain, also closing record-high at 17 068.26, while Nasdaq 100 added 0.61% for an all-time-high close of 3923.01. Dow Jones Euro Stoxx 50 closed for a 1.01% gain.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, were unchanged on Friday, after they gained almost 6 tons on Tuesday and stand at 796.39 tons. The fund scored another massive gain of more than 5 tons on Monday, after adding 3 tons last week as well. Assets were recently pressured to multi-year lows by a recovering US economy.

The US Dollar Index, which measures the greenback’s performance against six other major currencies, unchanged on Friday, and logged a weekly gain of 0.25%, bolstered by the payrolls figure.

ECB rates

The European Central Bank (ECB) announced its benchmark interest rate and deposit rate earlier today. The main lending rate was kept at 0.15% after it was reduced from 0.25% the previous month, while the deposit rate for commercial banks which keep their money at the ECB was bumped into positive ground again, at 0.10%. Last month it was pushed to -0.10%, which meant the ECB was taxing banks for keeping their money, in a bid to prompt increased consumer lending.

Next week is somewhat lackluster in terms of economic data. Minutes from the FOMC June meeting will be released on Wednesday, while the ECB will post its monthly report on Thursday.