Gold was trading slightly higher on Thursday morning in London while awaiting direction from the blockbuster US payrolls report due on Friday, which could influence investor thinking about the probability of a rate rise in the coming months
– The spot gold price was last at $1,215.90/1,216.20 per ounce, up $2.80 on Wednesday’s close. Trade has ranged narrowly from $1,211.30 to $1,217.70 so far.
– US data has grown in importance since the Federal Open Market Committee (FOMC) released hawkish April meeting minutes, saying it is prepared to raise rates as soon as this month. If the labour market continues to show improvement while inflation and wages tick higher, the likelihood of an increase at its June meeting grows.
– Key economic data due later today includes the US ADP non-farm employment – a precursor to Friday’s jobs report – as well as weekly unemployment claims, Challenger job cuts and crude oil inventories.
– The European Central Bank will also conclude its policy meeting later on Thursday although no change is expected to its monetary policy and stimulus package.
– “With the FOMC meeting two weeks away and with the market more bullish about an interest-rate rise, gold may struggle on the upside for a while and spend more time consolidating. After the FOMC decision, the focus is likely to turn to the Brexit vote, which is likely to heat up in the final run-up to the vote,” FastMarkets’ William Adams said.
“We still like gold’s price outlook and think this price dip will attract and unleash pent-up demand but the market is likely to remain nervous and choppy until after the Brexit vote,” he added.
– In the other metals, silver was little changed at $15.990/16.010 per ounce, platinum at $973/978 was up $6 and palladium climbed $3 to $543/548.
(Additional reporting by Vivian Teo, editing by Mark Shaw)
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Source: Bullion Desk News
