Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged 2.5% to close just under $1,243, posting its biggest one-day rise in eleven weeks, after an abysmal jobs report all but slammed the door on a June rate hike from the Fed. The metal finished the week 2.2% higher for its first weekly win in a month.

Merely 38,000 new jobs were created in May, according the Labor Department, and totals for March and April were revised lower by a combined 59,000. Temp employment, which usually rise in a growing economy, fell by 21,000 for the sharpest decline in seven years. The unemployment rate fell to 4.7%, but only because nearly 500,000 people left the workforce.

The shockingly weak labor data raises doubts about the economy and drastically reduces the likelihood of higher interest rates this summer. The CME Fedwatch tool, which tracks Fed funds futures to forecast the probability of rate hikes, shows June at 6%, down from 21% yesterday. July is now at 33%, down from 58% yesterday.

The dollar plunged 1.6% to a three-week low after the payrolls report, boosting gold and other commodities denominated in it for international trade by making them less expensive to users of other currencies.

The buck was also pressured by reports from the ISM and Markit showing the U.S. services sector slowed by the most in more than two years in May.

The other precious also finished sharply higher. Silver jumped 2.1% to close the week with a gain of 0.6%. Platinum added 2.3% to finish nearly flat for the week. Palladium climbed 2.8% today to finish with a 1.8% weekly rise.

At the Comex close: August gold surged 30.30 to $1,242.90; July silver jumped 34 cents to $16.37; July platinum rose 21.80 to $981.90; and September palladium climbed $14.90 to $549.35 an ounce.