US GOLD UPDATE – Gold holds near 1-mth high, US jobs grow but wages fall

Gold futures reached a one-month high on Friday afternoon in the US after today’s employment report showed that wages fell last month, offsetting a strong headline jobs number.

Gold for April delivery on the Comex division of the New York Mercantile Exchange jumped $15.0 or 1.2 percent to $1,273.20 per ounce. The contract breached $1,280 earlier to reach its highest since February 2.

The precious metal has been a leading beneficiary of the equity sell-off and general market unrest. A Chinese economic downturn coupled with European and Japanese growth concerns are drawing comparisons with the 2008/2009 economic calamity, burnishing traditional safe-haven assets such as gold.

The introduction of negative interest rates by Japan’s Central Bank has thrown the Federal Reserve’s tightening strategy into stark relief and raised questions about whether its policy board will reverse course to  spark a tepid recovery.

“Gold cruised to a bull market, heedless of rebounding stock markets, as traders expect central banks to curb yields on other investments in an effort to spur economic growth,” George Gero of RBC Wealth Management said. “The metal is up more than 20 percent since a December low, the common definition of a bull market, outpacing all major assets.”

The US economic recovery is still seeing thousands of citizens return to work but it wasn’t all good news despite the headline figure of 242,000 added jobs.

It brings the record positive growth figure to 65 straight months and beat the forecast for 195,000 jobs to have been created last month. The readings for the past two months were revised upwards by a combined 30,000 jobs.

The unemployment rate held at 4.9 percent last month but average hourly earnings fell 0.1 percent – a rise of 0.2 percent had been seen.

A lack of wage growth signals that even as millions of Americans have returned to the workforce since the recession there is still slack in the labour market.

“The fact gold is rallied as well as other markets this week is another sign that there are those out there who are getting more concerned about the health of the financial markets again,” FastMarkets head of research William Adams said.

Mining and manufacturing jobs remain the primary drag on job creation – 19,000 miners lost their job last month, bringing the total to 171,000 lost jobs since September 2014.

And in other data, the US trade balance at -$45.7 billion was below the expected -$43.5 billion.

In domestic markets, the Dow Jones industrial average and S&P were up 0.3 percent and 0.4 percent respectively, while the dollar slipped 0.7 percent to 1.1024 against the euro.

As for other precious metals, Comex silver for May delivery rose 16.4 cents or 1.1 percent to $15.310 per ounce. Trade has ranged from $15.150 to $15.570.

Platinum for April settlement increased $9.70 or one percent to $952.40 per ounce while the most active palladium contract at $542.65 was up 45 cents.

(Editing by Mark Shaw)