Gold prices were volatile on Friday, closing out a week of overall losses, although prices finished the day little changed compared with Thursday’s close.
Gold traded mostly in a range of $2,040 to $2,050 an ounce on Friday, barring a brief period of heightened volatility which saw prices drop sharply to $2,025 before rebounding quickly to $2,061 an ounce.
The trigger for the early afternoon volatility appeared to be the release of US Non-Farm Payrolls figures, which showed that 216,000 jobs were added in November, versus consensus of 170,000. However, the picture was further muddied later Friday afternoon with the release of US ISM Services PMI data, which came in below expectations and showed the lowest reading in seven months, painting a somewhat mixed view of the US economy.
Generally, signs of relative economic strength create headwinds for gold, given the yellow metal’s status as a safe haven asset. Buoyant economic indicators are also bearish for gold because they create pressure on central banks to maintain higher interest rates for a longer period.
On the fundamentals side, central banks bought a net volume of 44 tons of gold in November, the World Gold Council said in a report released Friday. That represents the sixth consecutive month in which central bank purchasing has outweighed sales, the figures showed.
Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.
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