Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.8%, closing at a six-week high above $1,280, as anemic U.S. job growth cast doubt on future rate hikes, undermining the dollar and boosting demand for alternative stores of value. The metal finished the week 1% higher for its fourth consecutive weekly gain.

The economy added 138,000 jobs in May, far fewer than expected, and totals for March and April were revised sharply lower, the Labor Department reported today. While the unemployment rate dropped from 4.4% to 4.3%, the improvement was attributed to workers leaving the labor force, not to more people finding jobs.

While May job growth was disappointing, it is unlikely to stop the Fed from raising interest rates by a quarter-point when it meets later this month. The central bank has tacitly committed itself to that hike already. But when combined with recent weakness in inflation, the softening labor market may dissuade the Fed from additional hikes later this year.

Government data released earlier this week showed inflation falling to 1.7% over the past 12 months, down from a high of 2.1% in February and well under the Fed's target 2%. Fed Governor Lael Brainard said weak inflation may cause the FOMC to reassess the pace of rate increases.

The dollar fell 0.5% on the disappointing jobs data, supporting gold and other commodities denominated in it for international trade. The buck has lost around 0.7% in the past week and 5.4% this year.

The other precious metals finished higher for the day and mixed for the week. Silver rose 1.4% for a weekly increase of 1.2%. Platinum gained 2.6% today but lost 1% this week. Palladium added 1.3% for a weekly rise of 6%.

At the Comex close: August gold gained $10.10 to $1,280.20; July silver picked up 24 cents to $17.53; July platinum jumped $24.40 to $953.40; and September palladium climbed $10.95 to $834.05 an ounce.