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Metals Stocks: Gold registers sharpest weekly gain in about 3 months after Friday’s jobs report

Gold futures edged higher Friday, notching the steepest weekly gain since mid November, following a stronger-than-expected monthly rise in the U.S. job market.

The jobs data was in “such contrast” to the ADP private-sector jobs report from Wednesday, Peter Spina, president and chief executive officer at GoldSeek.com, told MarketWatch. ADP had said U.S. businesses shed 301,000 jobs in January, which was the biggest drop since the start of the pandemic.

With lowered expectations in hand, the strong U.S. jobs reading on Friday “knocked gold’s price rise in Europe — as it was nearing its next big technical resistance around the $1,820 area,” said Spina.

Payrolls were expected to be weak because the spread of the omicron variant was peaking at the time when the government was compiling labor data last month. However, the U.S. added a robust 467,000 jobs in January and hiring was much stronger at the end of 2021 than originally reported. Economists polled by The Wall Street Journal had forecast 150,000 new jobs.

On Comex, gold for April delivery GC00, +0.21% GCJ22, +0.21% rose $3.70, or 0.2%, to settle at $1,807.80 an ounce. Prices had briefly dipped below the key $1,800 after the jobs data and touched an intraday of $1,792.10, FactSet data show. March silver SI00, +0.49% SIH22, +0.49% rose 10 cents, or nearly 0.5%, at $22.475 an ounce.

Gold logged a weekly gain of 1.2%, which would represent its sharpest such advance since a 2,85% advance in the week ended Nov. 12. Meanwhile, silver climbed about 0.8% for the week.

Gold has risen despite continued expectations the Federal Reserve will move aggressively to raise interest rates, likely beginning in March, and take other actions to withdraw monetary stimulus in an effort to rein in inflation.

“The zero rates and massive [quantitative easing] which helped gold and the Nasdaq soar during 2020s COVID shock are now being removed, but gold is holding firmer first because it peaked sooner and so is now far less stretched, and second because — across longer time frames — the precious metals tends to do well when equities lose value,” Adrian Ash, director of research at BullionVault, told MarketWatch.

Overall, the gold market is showing strength, said Spina.

On Thursday, prices also fell below the key $1,800 mark, but strong buying support entered the market, quickly reversing the fall, he said. “This is a sign of strength.”

“Upward price moves now will place greater pressures on key overhead resistances,” said the GoldSeek.com CEO. “Over the coming several weeks, I do expect the price to make a run towards $1,920 and even much higher. It will remain volatile and is not immune to falling hard again.”

““Inflation and real negative rates are going to keep fueling the gold price to new record dollar highs. The stage is set.””

— Peter Spina, GoldSeek.com

Still, as long as prices remain above $1,750 and selloffs get rejected, the price is going to finally make its long awaited breakout, he said. “Inflation and real negative rates are going to keep fueling the gold price to new record dollar highs. The stage is set.”

Among other metals traded on Comex, March copper HGH22, +0.49% rose 0.4% to $4.488 a pound, ending 4.1% higher for the week. April platinum PLJ22, -0.40% lost 0.6% to $1,024.20 an ounce, but saw a weekly rise of 1.8%. March palladium PAH22, -1.24% settled at $2,290.70 an ounce, down 1.2% for the session, and posting a weekly loss of 3.6%.

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