These Factors Are Driving Gold and Silver

Economic measures

On Friday, June 2, precious metals saw a bright day. One of the most important factors playing on these metals on Friday was the economic data that came out of the US. Gold futures for July expiration rose 0.8% to close at $1,278.4 an ounce, the highest close for gold since April after four straight weeks of gains.

The spur in these metals was due to weak economic data. The US added 138,000 jobs in May. The 185,000 increase in non-farm jobs was expected. Such weak numbers point towards a tight labor market, which makes it harder for companies to fill jobs.

These Factors Are Driving Gold and Silver

Precious metals, funds, and miners

However, the unemployment rate, which measures the percentage of the total workforce that is unemployed and actively seeking employment, fell from 4.4% in the last month to 4.3%. Analysts were expecting the unemployment rate to remain at 4.4%. The fall in employment comes as good news for the economy.

The above chart shows the fluctuations in silver prices since the beginning of 2015. Silver is more volatile than gold and is also used as an industrial metal just like platinum and palladium. Silver and gold-related funds like the iShares Silver Trust (SLV) and the iShares Gold Trust (IAU) have risen 9.8% and 10.9%, respectively, on a YTD basis.

Mining stocks like Kinross Gold (KGC), Eldorado Gold (EGO), IAMGOLD (IAG), and Harmony Gold (HMY) have also been following these metals.

The global economic data that could also affect the metals and miners include durable good, factory order, and labor cost data. The EU and the China Business Summit may also boost global sentiment, which in turn could affect the haven bids for precious metals.