Base and precious metals traded in a worn-trough Thursday in the US, while reduced volumes demonstrate investors are content to wait for tomorrow’s US employment report before returning from the sidelines.
Copper for July delivery on the Comex division of the New York Mercantile Exchange declined 30 cents to finish at $2.0700 per pound. Volumes barely reached 60,000 contracts today after averaging 90,000 throughout the week.
Comex gold for August settlement fell $2.10 or 0.2 percent to close at $1,212.60 per ounce. Trade ranged from $1,212.0 to $1,220.0.
Tomorrow’s US employment report has grown in importance since the Federal Reserve indicated that a majority of its members were growing more comfortable with a June rate hike.
Citing an improving labour market and signs of inflation, various Fed members said that if positive data continued that interest rate normalisation would be appropriate.
Still, only about 20 percent of investors expect a rate increase in a couple of weeks despite hawkish rhetoric from the policy board, according to the CME Group FedWatch
“It’s a real slowdown. Things have been very quiet this week – macro sentiment is lacklustre,” a trader said. “Many are on the sidelines ahead of the key US non-farm payroll release tomorrow hoping it will provide a clearer path to US policy bets.”
Earlier in monetary news, the European Central Bank (ECB) as expected maintained current nominal interest rate levels. The economic bloc is struggling with stagnant growth and non-existent inflation while also dealing with a possible UK exit – known as the ‘Brexit’.
In a preview of Friday’s jobs report, the ADP non-farm employment change for May came in at 173,000, in-line with expectations of 174,000.
Challenger job cuts year-over-year in May were down 26.5 percent, a major improvement from the previous 5.8-percent increase. Unemployment claims over May 20-27 at 267,000 were slightly better than the expected 270,000.
Turning to US markets, the Dow Jones industrial average and S&P were each up 0.1 percent, while the dollar strengthened 0.4 percent to $1.1154 against the euro.
In other commodities, light sweet crude (WTI) oil futures on the Nymex reversed up four cents or 0.1 percent to $49.05 per barrel.
Members of the the Organization of Petroleum Exporting Countries (OPEC) failed to reach an agreement on collective output ceiling while meeting in Vienna today.
Continued Iran aggressiveness in reclaiming its pre-sanction market share is preventing any type of unified resolution to reduce the existing supply glut.
“In the short term we see both WTI and Brent crude maintain the established trading range between $45 and $50,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said. “Depending on what kind demand we will see across the Northern hemisphere and especially in the US this summer we should see oil continue its ascent as we approach year-end.”
The post Copper, gold soften ahead of critical US jobs report appeared first on The Bullion Desk.
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Source: Bullion Desk News
