Gold and silver prices fell off a cliff on Friday (June 7) after seeing strength earlier in the week.
The yellow metal rose as high as US$2,386.62 per ounce on Thursday (June 6), while its sister metal hit US$31.49 per ounce the same day. But strong US jobs data and gold-related news out of China turned those gains around.
May data from the US Bureau of Labor Statistics shows that 272,000 nonfarm payroll jobs were added for the month, much higher than the 180,000 anticipated by experts. The unemployment rate came in at 4 percent for the period.
The US Federal Reserve is scheduled to meet next week from June 12 to 13, and although it is not expected to cut interest rates until the fall, Friday's jobs numbers have raised questions about how many reductions 2024 will bring.
"We had been anticipating the start of rate cuts in September, totaling (two) cuts this year but the persevering strong employment gains raises the likelihood of later rate cuts" — Kathy Bostjancic, Nationwide
News was different outside the US, with the European Central Bank cutting interest rates for the first time since 2019 on Thursday. Its key rate had been at a record 4 percent since September of last year. Earlier in the week, the Bank of Canada became the first G7 nation to lower rates, taking its overnight rate to 4.75 percent.
Amid these developments, the People’s Bank of China reported that it didn't buy any gold in May, the first time in 18 months that it didn't add to its holdings. Central bank buying from China and other countries has helped the precious metal reach new highs in 2024, and the news that it didn't stock up last month added to gold's downward momentum.
Gold closed Friday at US$2,293.57, while silver finished at US$29.17.
Bullet briefing — Barrick hit by NYSE glitch, Sprott copper ETF debuts
NYSE glitch shows big drop for Barrick
The New York Stock Exchange (NYSE) was quick to fix a glitch that made shares of major miner Barrick Gold (TSX:ABX,NYSE:GOLD) appear to drop nearly 100 percent on Monday (June 3).
According to the exchange, the issue was related to limit up-limit down bands, which are put in place to restrict extreme share price movements. After it was resolved, the NYSE said it was reviewing erroneous trades in about 40 companies.
Warren Buffet's Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) was among the companies affected, as was well-known meme stock GameStop (NYSE:GME), which faced other turmoil this week as well.
Sprott launches physical copper ETF
Copper has been making headlines in 2024 as prices gain momentum, and this week Sprott Asset Management gave investors a new way to get exposure to the red metal. The firm's Sprott Physical Copper Trust (TSX:COP.U,TSX:COP,UN) started trading on the TSX in both US and Canadian dollars on Thursday (June 6).
The trust's initial public offering, which closed the same day, raised gross proceeds of US$100 million.
According to Sprott's John Ciampaglia, the trust is the world's first physical copper investment fund. While Ciampaglia is perhaps best known for his uranium commentary, in a conversation about two months ago he said he sees copper as a metal that's a little further behind on the curve, but is quickly coming into focus.
"The Trust will address a need in the market by providing investors with an alternative to holding copper futures. Investor interest in copper is growing globally given its critical role as a key component in electrification, clean energy technologies, electric vehicles and artificial intelligence," he noted in Thursday's press release.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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