Gold held its ground on Thursday as investors looked forward to U.S. non-farm payrolls data due later this week to assess the U.S. interest rate path, while silver prices rose above the key $35 per ounce level for the first time since October 2012.
“I would say that the path of least resistance remains to the upside, despite today’s sort of flat mode for gold trading. But I think this is more due to traders being in wait-and-see mode ahead of non-farm payrolls,” said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.
Wednesday’s ADP National Employment Report revealed U.S. private payrolls increased far less than expected in May. U.S. President Donald Trump on Wednesday called for Fed Chair Jerome Powell to lower interest rates.
“I think that a weakening in the U.S. labor market will increase bets on a dovish Fed, so on the Fed cutting interest rates, (which) would be positive for gold,” Evangelista added.
Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.
Meanwhile, spot silver jumped 2.5% to $35.83 per ounce, its highest level since February 2012.
Silver’s “recent underperformance against gold because of economic concerns, given that 70% of silver usage is industrial, it looks that there could be some ratio trading going on now that it has dipped below the 100 level,” StoneX analyst Rhona O’Connell said.
The gold-silver ratio, denoting how many ounces of silver one ounce of gold can buy, is used by the market to gauge future trends as it indicates silver’s current performance against its historical correlation with gold.
Platinum rose 3.6% to $1,123.88, its highest level since March 2022, and palladium was up 1.8% at $1,018.38.
“Tangible assets with limited supply such as gold, silver, platinum and copper should be part of a broad portfolio in order to mitigate any economic fallout from geopolitical events, government mismanagement of debt and rising inflation threat” said Ole Hansen, head of commodity strategy at Saxo Bank.
Trump on Wednesday said the nation’s debt ceiling should be eliminated, saying he agreed with Democratic Senator Elizabeth Warren’s view on the subject.
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