Gold slips after this morning’s positive jobs report after tumbling along with the broader market in the previous session in response to U.S. President Donald Trump’s latest round of tariffs, retaliatory actions and expectations about their impact on the global economy.
Earlier in the trading day, gold had boosted back above the $3100 an ounce line as China announced it will impose additional tariffs of 34% on all U.S. goods from April 10, escalating the trading war. The Dow has dropped over 1000 points, 2.55%, for the day in response.
Job growth in March was much stronger than expected per this morning’s Labor Department report. Nonfarm payrolls jumped 228,000, up from the revised 117,000 in February and better than the 140,000 forecast. However, the unemployment rate rose to 4.2%, exceeding the 4.1% forecast.
Investors are awaiting a speech by Federal Reserve Chairman Jerome Powell for further direction. The S&P 500 posted its biggest one-day loss since 2020 on Thursday after Trump unveiled sweeping tariffs, increasing the risk of a global trade war that economists warn could send the economy into a recession.
June gold futures slid 1.4% Thursday to settle at $3,121.70 an ounce on Comex, though the most-active contract gained 0.2% in the first four days of the week. Bullion gained 11% in March after rising 0.5% in February and adding 7.3% in January. It rallied more than $500, or 19%, in in the three months ended in March, the best quarter since 1986. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract is currently down $27.50 (-0.88%) an ounce to $3094.20 and the DG spot price is $3077.60.
Markets have been jittery amid fears that the tariffs would worsen inflation and may ultimately delay the Fed’s expected upcoming interest rate cuts. But investors have firmed bets that the rate cuts will start in June. Rate cuts are typically considered bullish for gold because they make the precious metal a more attractive alternate investment.
Earlier this week, the private payrolls report from ADP for last month showed that private companies added 155,00 jobs workers, more than the 118,000 that economists had expected and a sign that tariffs and mass government layoffs at least so far haven’t affected the private sector. The February figure was upwardly revised to 115,000.
The Fed closely follows labor market and inflation data when setting monetary policy. The Fed’s favorite inflation measure, the personal consumption expenditures price index, came in higher than expected for February in data released at the end of last week.
Virtually all investors tracked by the CME FedWatch Tool expect the Fed to cut interest rates in June but leave them unchanged at Fed policymakers’ next meeting in May. 60.8% expect a 25 basis point reduction while 38.1% look for a 50 basis point cut. The Fed began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
The Fed left rates unchanged at 4.25% to 4.50% in March. It reduced rates three times in 2024.
Front-month silver futures lost 7.7% Thursday to settle at $31.97 an ounce on Comex, and the May contract decreased 8.2% in the first four days of the week. Silver advanced 9.9% in March after retreating 2.4% in February and adding 10% in January. It gained 21% in 2024. The May contract is currently down $1.395 (-4.36%) an ounce to $30.575 and the DG spot price is $30.58.
Spot palladium tumbled 4.3% Thursday to $937.50 an ounce and is down 4.7% so far this week. Palladium gained 7.3% last month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. Currently, the DG spot price is down $18.80 an ounce to $921.00.
Spot platinum fell 1.8% Thursday to $962.00 an ounce, and it decreased 2.6% in the first four days of the week. Platinum increased 6.7% in March after sliding 4.7% in February and gaining 8.4% in January. Platinum lost 8.4% in 2024. The DG spot price is currently down $30.30 an ounce to $931.30.
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