Gold and silver prices struggled on Friday as a better-than-expected February jobs report was made public by the U.S. Department of Labor (DOL). Within a matter of minutes, the gold price dropped more than $10. At the end of the day, gold was down a total of approximately 3%. Friday also marked the first day in 2015 that gold dropped below it’s 2014 close.
The DOL report said that 295,000 U.S. jobs were added in February. That number is significantly greater than the 240,000 jobs that many economists had expected, which is probably one of the main reasons that precious metals prices reacted so strongly. This is the ninth monthly report to outperform predictions in the past year. The unemployment rate was pegged at 5.5% – down from 5.7% in January.
Investors have been heavily focused on future interest rates for quite some time now, and this new information has spurred a fresh round of speculation. Before today, many (although certainly not all) analysts had expected that the Federal Reserve might start boosting interest rates near the end of 2015 or early 2016. Now, many are expecting a rate hike closer to mid-2015.
We all know that the Fed loves to arbitrarily lower