Gold ends with weekly declines; buy the dips going ahead
gold recovered in an extremely volatile session on Friday to close with a gain of 0.12% at $2,046. However, despite an impressive recovery from Friday's low of $2,024, the metal closed with a loss of around 0.80% on the week.
The US data released on Friday were mixed as the non-farm payrolls rose 2,16,000 versus the forecast of 1,75,000, as the prior data stood at 1,73,000 jobs. Unusually warm winters boosted the job sector as health care, government, construction, leisure and hospitality sectors led the job gains.
Net two-month job revisions stood at -71000. Earnings were upbeat as average hourly earnings stood at 0.4% m/m versus the forecast of 0.3%, thus keeping pace with the prior data of 0.4%. Y-o-Y average hourly reading was noted to be 4.1%, which topped the forecast of 3.9%.
The unemployment rate of 3.7% matched the prior data of 3.7% but was better than the estimated figure of 3.8%.
However, the labour force participation rate slipped to 62.5% vs the prior 62.8%, which reflects a risk of a pickup in wage inflation. Change in household employment was -6,83,000. Household survey data will be revised back 5 years with Friday’s release.
The stellar nonfarm payroll job report is not without certain caveats as it is taking longer for Americans to find work. In addition, the number of full-time employees dropped the most since April 2020 as temp-help employment dropped to the lowest level since May 2020. Hours worked eased to 34.30 from 34.40 as the underemployment rate edged up to 7.10% from 7%.
Gold prices came under intense immediate downside pressure on better-than-expected US non-farm payroll data.
