(RTTNews) – Reversing gains from yesterday’s session, gold prices have plummeted on Friday as economists assessed today’s strong non-farm payrolls data, which supported the potential for an interest rate hike by the U.S. Federal Reserve.
Front Month Comex Gold for August month delivery has plunged by $142.80 (or 3.17%) to $4,362.20 per troy ounce.
Front Month Comex Silver for August month delivery has nosedived by $4.775 (or 6.43%) to $69.485 per troy ounce.
The gulf war entered day number 98 today. The Strait of Hormuz continues to remain effectively shut, raising oil supply disruption concerns and consequent inflation worries. Since the war began, gold prices have fallen nearly 16%.
In the U.S., the Bureau of Labor Statistics revealed today that the economy added 172,000 jobs in May, well above forecasts of 85,000, following an upwardly revised 179,000 gain over the previous month.
The numbers point to resilience in the labor market despite headwinds to the economy from rising oil and energy prices.
The unemployment rate remained at 4.30% in May, in line with market expectations.
The number of unemployed decreased by 66,000 to 7,310,000, while total employment increased by 149,000 to 162,770,000.
The stronger-than-expected jobs data along with continuing Middle East uncertainty brought inflation and interest rate concerns back to investors’ attention.
The U.S. Dollar Index was last seen trading at 100.01, up by 0.58 points (or 0.58%).
According to CME Group’s FedWatch Tool, investors are betting on just a 3.80% chance of a quarter-basis-point interest rate cut in the upcoming Federal Reserve’s meeting on June 16-17.
On Wednesday, mediated by the U.S., Israel and Lebanon agreed to renew their earlier agreed but intermittently violated ceasefire.
The ceasefire is contingent on a complete cessation of Hezbollah militant group’s firings as well as the evacuation of all Hezbollah operatives from the South Litani Sector.
Among other contentious provisions, Lebanon should create pilot security zones where the Iran-backed Hezbollah would be banned.
The two sides plan to talk by the end of this month to work out a comprehensive deal.
However, Hezbollah rejected the ceasefire agreement and stated it would not pull back its troops. Its leader Naim Qassem termed the truce a “farce.”
With regard to the U.S.-Iran conflict, yesterday U.S. President Donald Trump announced that talks were progressing very well and added that he expected a deal to be announced probably over this weekend.
Trump emphasized that once an agreement is signed, the Strait of Hormuz will be reopened quickly.
Supporting Trump’s statement, Iran’s Foreign Minister Abbas Araghchi announced that Iran has opened all channels of communication with the U.S. and confirmed negotiations were continuing with interruption.
Mohsen Rezaei, the adviser to Iran’s Supreme Leader Mojtaba Khamenei, stated that the negotiated Memorandum of Understanding contains “ambiguities” that awaits clarification.
Meanwhile, the Iranian Army stated today that Iran’s Navy fired warning shots using Qadir missiles and Shahed Danesh drones toward U.S. destroyers DDG-103 and DDG-87 operating in the Sea of Oman in response to what it called a U.S. harassment move. The Iranian Army claimed the operation forced U.S. Naval assets to leave the area.
Against the backdrop of these developments, concerns that U.S. interest rates could remain in the higher range for a longer period of time pulled down gold prices.
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