Gold futures staged a modest recovery after mixed US data extinguished a dollar rally, although tomorrow’s US employment report remains the primary market event and price driver.
Gold for December settlement on the Comex division of the New York Mercantile Exchange gained $4.50 or 0.3 percent to $1,315.90. The contract had been trading at a two-month low this morning.
Precious metals have seen consistent pressure since various Federal Reserve officials spoke about a potential September rate hike. The hawkish tone boosted the dollar, but mixed data from the US erased the two-week high with the greenback last trading at 95.68.
Investors now turn to tomorrow’s blockbuster US employment data to gauge the direction of gold prices before the start of the holiday weekend – economic consensus is for 186,000 jobs to have been added.
Yesterday in a preview of the Friday employment report, ADP non-farm employment change in August showed 177,000 Americans joined the labour market, besting the forecast of 173,000.
“Another lacklustre day in the precious metals markets, with an attempt to push gold through the psychologically important support at $1,300, which failed and created a bit of short covering,” David Govett of Marex Spectron said. “Movements were dictated primarily by the dollar and with NFPs out tomorrow, the market is once again in wait and see mode.”
In paper holdings, exchange-traded-funds collapsed overnight, falling 11.2 tonnes to 2,105 tonnes total. It’s another sign that the investment community is seeking alternative investments following a dollar surge and general poor backdrop for safe-haven assets.
“Dollar strength and signs of disinvestment from institutional investors continue to create short-term pressure for gold,” James Moore, research analyst at FastMarkets, said. “Further dips buying support is expected; however, bearish signals from silver could a precursor for weakness in gold, with a breach of $1,300 likely to generate deeper downside pressure.”
In a jam-packed data day, US challenger job cuts year-over-year in August fell 21.8 percent, off the previous mark of 57.1 percent. Weekly unemployment claims between August 18-25 came in at 263,000, below the 265,000 forecast and more importantly, under the psychological 300,000 point.
Revised non-farm productivity quarter-over-quarter in the second quarter was in-line with estimates at -0.6 percent, while revised unit labour in the same period rose 4.3 percent – a 2.0 percent increase was expected.
Final manufacturing PMI in August stood at 52.0, around the 52.1 estimate. ISM manufacturing PMI in August disappointed at 49.4 – 52.0 was the economic consensus. Construction spending month-over-month was unchanged and ISM manufacturing prices in August hit 53.0, around the 54.5 projection.
Turning to American markets, the Dow Jones industrial average and S&P were each down 0.1 percent, while the dollar slipped 0.4 percent to $1.1199 against the euro.
As for other precious metals, Comex silver for September delivery jumped 24.3 cents or 1.3 percent to $18.865 per ounce. Trade has ranged from $18.585 to $18.900.
Platinum for October settlement fell $5.70 or 0.5 percent to $1,047.80 per ounce, while the most active palladium contract stood at $662.05 per ounce, down $6.65.
(Editing by Tom Jennemann)
The post Gold reverses upward amid dollar softening appeared first on The Bullion Desk.
Read More
Source: Bullion Desk News
