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What Led to a Rebound in Precious Metals on May 11?

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Part 2
What Led to a Rebound in Precious Metals on May 11? PART 2 OF 5

Did Employment Reports Affect Gold and Other Metals?

Employment numbers

On Thursday, the unemployment claims numbers, which measure the number of individuals who filed for unemployment insurance for the first time during the past week, stood lower than the forecasted figure of 245,000. The number came out to be 238,000.

The PPI, measuring the change in the price of finished goods and services sold by producers, was also positive. It stood at 0.5%, much above the analyst expectation of 0.2%. Such robust numbers from the US could mean that the June rate hike chances are increasing.

Did Employment Reports Affect Gold and Other Metals?

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Fed and gold

The US Federal Reserve will closely watch the economic indicators before their decision at the upcoming June meeting. The interest rates closely affect precious metals. The higher interest rates surge, the lower the demand for gold and silver. These metals are non-yield bearers, and their demand suffers as the Treasuries offer a higher yield.

Often, safe-haven bids call for both US Treasuries as well precious metals. When yields are higher, miners will be tilted towards Treasuries, thus deserting the metals.

The rise in precious metals on Thursday also affected funds and miners. The iShares Gold Trust (IAU) and the iShares Silver Trust (SLV) also rose on Thursday by 0.26% and 0.65%, respectively.

Miners like Sibanye Gold (SBGL), Gold Fields (GFI), Newmont Mining (NEM), and New Gold (NGD) also rose on Thursday by 2.2%, 4.5%, 1.6%, and 4.6%, respectively.

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