Gold Suffers Losses After Trump’s Decision To Pull Out Of Paris Accord
Gold prices retreated after U.S. President Donald Trump announced his intention to pull out of the landmark 2015 global climate pact.
“We're getting out,” Trump said at a ceremony in the White House Rose Garden. “In order to fulfill my solemn duty to protect America and its citizens, the United States will withdraw from the Paris climate accord.”
Following Trump’s speech, gold declined. Spot gold on Kitco.com was trading at $1,262.20 during the opening hours of the Asian session on Friday.
Trump made clear that he’d be open to negotiations to re-join the accord or commit to a new one based on “terms that are fair to the United States, its businesses, its workers, its people, its taxpayers.”
But, shortly after the Trump’s statements, Italy, France and Germany spoke out in defense of the climate agreement and dismissed the idea that the global accord can be renegotiated.
"We deem the momentum generated in Paris in December 2015 irreversible and we firmly believe that the Paris Agreement cannot be renegotiated since it is a vital instrument for our planet, societies and economies,” stated a joint statement, which was released by the three leaders — Italian Prime Minister Paolo Gentiloni, German Chancellor Angela Merkel and French President Emmanuel Macron.
As the market digests latest geopolitical news, all eyes turn to the key non-farm payrolls report that is scheduled to be released on Friday. The consensus ahead of the May’s release is estimating to see 210,000 new positions added.
“However, the stronger ADP number on Thursday has many thinking Friday’s non-farm jobs number could be a miss to the upside, too. Such would also likely be bearish for the precious metals,” said Jim Wyckoff, senior market analyst and columnist in his PM Roundup.
Friday’s employment report will be the last release that the Federal Reserve is able to take into account before making its highly anticipated rate hike decision at the monetary policy meeting, which will take place mid-June.
“Tomorrow’s report will be the last [set of] numbers that Fed members will use to ascertain whether a June interest rate hike is appropriate,” said Gary Wagner, editor of thegoldforecast.com, in his daily commentary. “With the next FOMC meeting scheduled to begin mid-month, substantial numbers in regards to the jobs report would only strengthen the resolve of Fed members to implement an interest rate hike during this meeting.”
Earlier in the day, the U.S. private payrolls processor ADP said that 253,000 jobs were created in May, which was more than the expected 181,000.
“Today’s reading from the ADP report poses some upside risk to our forecast for non-farm payrolls tomorrow. However, note that the difference between the ADP private payroll and BLS’ non-farm payroll numbers has been relatively large compared with historical averages, with ADP reporting somewhat stronger private payroll growth during 2017,” noted analysts at Nomura’s Global Markets Research.