Gold Futures Prices Continue to Gleam after Weak Jobs | RJO Futures

September 6, 2016 7:36AM CDT

Commodities futures markets continue to absorb last Friday’s weaker-than-expected August Employment report, resulting in gold futures prices continuing to gleam from the slowdown in the labor market.

The December contract in gold futures was up 1.30 percent at $1,344 an ounce in Tuesday morning in the commodities futures markets. Meanwhile, the December contract in silver futures jumped 2.45 percent to 19.84, and copper futures prices for the same contract month were up .29 percent at 2.084.

On Friday, the U.S. Department of Labor reported that employers added 151,000 jobs in August, far fewer than most economists’ expectations, while the unemployment rate remained unchanged at 4.9 percent. The report led most analysts to believe that commodities futures markets and equity markets investors should not expect the U.S. central bank to raise interest rates in the entirety of 2016.

The prospect of lower rates for longer can weigh on U.S. dollar index futures, and boost the appeal of dollar-priced commodity futures products such as gold futures and silver futures, as prices are lowered for holders of other currencies. Lower rates can also stop some investors from leaving precious metals futures products in favor of commodities futures products that pay interest.

The economic calendar in this shortened trading week within the commodities futures markets is less populated than last week. On Tuesday, the Institute for Supply Management Index for the month of August came in at 51.4 compared to expectations of around 54.2, also lending support to gold futures prices. The reading was the lowest since February 2010, but any number above 50 signals growth, and services firms have now expanded for 79 straight months.

The rest of the week’s reports in the U.S. include the September release of the Fed’s Beige Book on Wednesday, and weekly data including Unemployment Claims, Crude Oil and Natural Gas Inventories on Thursday. The Consumer Credit report for July is also released Thursday. On Friday, July Wholesale Inventories are due.

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