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Gold prices finished higher last week with most of the week’s gains coming from Friday’s stunning reversal and reaction to lower demand for risky assets and the weaker-than-expected U.S. Non-Farm Payrolls report.
June Comex gold closed the week at $1336.10, up $8.80 or +0.66%.
Gold changed its trend to down on the daily chart on Friday before mounting a strong rebound rally. The weekly uptrend, however, remained intact. It will change to down on a move through $1309.30.
Prices rose late in the week as Wall Street equities plunged and the U.S. Dollar weakened amid another threat by President Trump to impose additional tariffs on China. Additionally, Chinese officials compounded the worries about a possible trade war, and U.S. jobs data came in weaker than expected.
Weekly Events Summary
The week started with China’s finance ministry announcing in a statement published April 1 it would impose retaliatory tariffs on up to 128 kinds of U.S. goods, following through on a treat initially made March 23 by Beijing that it would target $3 billion worth of American imports.
On April 3, President Donald Trump unveiled a list of Chinese imports his administration aims to target as part of a crackdown on what the president deems unfair trade practices.
China, on April 4, countered the latest move by the U.S. by announcing additional tariffs on 106 U.S. products.
On April 5, President Donald Trump said he instructed the United States Trade Representative to consider $100 billion in additional tariffs against China.
The week ended with China’s Commerce Ministry saying the country will not hesitate to react with a “major response” to new tariffs from the U.S.
U.S. Economic Data
The Bureau of Labor Statistics reported on Friday that non-farm payrolls rose 103,000 in March while the unemployment rate was 4.1 percent, falling well short of Wall Street expectations during a month where weather caused havoc on the jobs market.
Economists and traders were looking for a payrolls gain of 193,000 and the unemployment rate to decline one-tenth of a point to 4 percent. This number represents a huge drop from the upwardly revised 326,000 in February. January’s figure was revised down from 239,000 to 176,000.
The closely watched average hourly earnings figure rose 0.3 percent against estimates of 0.2 percent. This pushed up the annual rate to 2.7 percent.
Forecast
Friday’s price action summed up what investors should expect to see this week. Gold is likely to be largely influenced by investor demand for risky assets. The direction of the U.S. Dollar should also dictate some of the move.