Gold steadies, silver climbs

Gold has steadied its decline but continues to hover around its four-month low. Little change is expected before the ECB meeting on Thursday and the U.S. jobs data release on Friday.

The non-farm payroll data release could give gold a nasty shock once more as it is expected to show that 215,000 jobs were added in May; this is above the 2014 average. On the flipside, it is also possible and likely that gold speculators have already priced in this good news.

Demand for alternative investments is waning, placing pressure on the gold price as data continues to show an improving U.S. economy boosting the dollar and equities. The rapid climb in stocks and equities may work in gold’s favor, as speculators see there is too much euphoria in the markets and buy gold as a hedge against a slowdown.

Silver climbed 0.5% this morning. ETF Securities said in an emailed note that “over the past week, investors have turned more positive in the outlook for the global economy and for a peaceful resolution to the Ukrainian crisis, with more industrially sensitive commodities like silver and nickel seeing strong inflows and gold seeing outflows.”

The firm saw $52 million worth of outflows from its gold ETFs last week.

About the Author

Jan Skoyles is Head of Research at The Real Asset Company, a platform for secure and efficient gold investment.