Gold futures were stuck sideways on Wednesday morning in the US, with investors awaiting US labour market data before determining a new direction for the market.
Gold for December settlement on the Comex division of the New York Mercantile Exchange was last down 20 cents or less than 0.1 percent at $1,316.30 per ounce. Trade has been confined to a narrow range between $1,312.90 and $1,319.20.
The yellow metal has come under pressure this week from hawkish statements from various Federal Reserve members but especially vice chairman Stanley Fischer.
The FOMC is targeting another rate rise before the year concludes, which has raised expectations for the central bank to move in September or December.
Markets will now await Friday’s 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 this month.
But for now a rebound in dollar is capping the potential upside – the dollar index was last at a two-week high of 96.19.
“A record investment surge in 2016 has pulled gold out of the doldrums yet the price remains far below its 2011 high,” Macquarie Research said in a note. “We attribute this to a stronger US economy – both shown in the dollar and yields – and signs of a jaded physical market. Our expectations for these suggest slow appreciation for the gold price is more likely than a spike higher.”
Fund positioning remains robust – holdings in the exchange-traded funds tracked by FastMarkets inched up 0.22 tonnes to 2,117 tonnes, not far from their highest since June 2013. Still, the rate of inflows have slowed.
“This slowdown is consistent with lower risk aversion and rising Fed tightening expectations due to a higher dollar and US real rates,” FastMarkets analyst Boris Mikanikrezai said.
Turning to European markets, Germany’s DAX was down 0.1 percent while France’s CAC-40 gained 0.6 percent. The dollar was 0.1 percent stronger at 1.1137 against the euro.
In data, the Chicago PMI, pending home sales and crude oil inventories are all due for release later.
As for other precious metals, Comex silver for September delivery rose 8.8 cents or 0.5 percent to $18.665 per ounce. Trade has ranged from $18.520 to $18.795.
Platinum for October settlement gained $6.40 or 0.5 percent to $1,063.0 per ounce while palladium at $684.10 was up $6.15.
(Editing by Mark Shaw)
The post Gold consolidates around $1,315, investors reassess outlook appeared first on The Bullion Desk.
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Source: Bullion Desk News
