(Kitco News) – Gold prices are sharply lower and hit a six-week low in early U.S. trading Friday, in the immediate aftermath of a stunning and completely unexpected big rise in U.S. jobs in May. The employment situation report from the Labor Department showed a rise of 2.51 million in non-farm payrolls in the month, which is way above market expectations for a decline of around 8 million.
In the April jobs report, there was a 20.5 million drop in non-farm payrolls. The unemployment rate of 13.3% in May was also way better than market expectations.
Risk appetite is now very keen late this week, and that’s bearish for the safe-haven metals. August gold futures were last down $37.00 an ounce at $1,690.20. July Comex silver prices were last down $0.516 at $17.55 an ounce.
Today’s U.S. jobs report from the Labor Department corroborates Wednesday’s much-better-than-expected ADP jobs report. Today’s report also suggests economists and analysts may have it all wrong on the lasting U.S. economic damage that some earlier this week said would take 10 years to fully recover from the Covid-19 pandemic-induced economic carnage.
Importantly for metals traders, today’s jobs data suggests the U.S. and very possibly other major world economies will snap back much faster than expected. If that’s the case then, what about the massive monetary stimulus the central banks have pumped into economies? The central banks can’t put that genie back into the bottle.
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