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How Did February’s Employment Numbers Affect Precious Metals?

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Mar. 8 2016, Published 12:35 p.m. ET

Employment numbers

The economic data released on Friday, March 4, showed 30,000 more jobs were added in December and January than previously reported. Investors were also watching the non-farm employment figure, which measures the change in the number of employed people during the previous month, excluding the farming industry. The outcome was 242,000, much higher than the estimate of 195,000. The unemployment rate, however, remained unchanged from the previous month and matched the forecast. 

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These crucial numbers, which were much-awaited by investors, aren’t likely to lead to another rate hike at the Federal Reserve’s meeting next week. However, fear that the US economy was running into a recession was eased. The distant possibility of rising interest rates helped the non-interest–bearing precious metals like gold, which surged 0.99% to close at $1,270.70 per ounce. Gold touched its 13-month high of $1,280.70 per ounce on the same day.

ETFs and miners

Despite a few strong numbers from last week, rising interest rates seem distant, which helps not only gold but also other precious metals like silver, platinum, and palladium. These three metals rose 3.6%, 4.6%, and 3.8%, respectively, on Friday, March 4. The iShares Silver Trust (SLV) and the Global X Silver Miners ETF (SIL) rose 1.8% and 2%, respectively, on the same day.

Many mining-based shares rose on Friday due to the increase in the precious metals. The best-performing precious metal miners on Friday included Eldorado Gold Corporation (EGO), B2Gold (BTG), and First Majestic Silver Corporation (AG). These three stocks rose 7.1%, 7.7%, and 2.7%, respectively, on Friday. These three companies make up 6.4% of the VanEck Vectors Gold Miners ETF (GDX). GDX, however, fell 0.55% due to fall of most of the mining shares.

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