The spot gold price drifted during Asian trading hours on Thursday morning as investors wait for the US August non-farm employment report which could determine whether the US Federal Reserve lifts interest rates in the near-term.
Spot gold was last at $1,310.15-1,310.45 per ounce, up just $1 from Wednesday’s close. Trading ranged at $1,305.85-1,311.90 so far after slipping to a fresh two-month low of $1,304.45 on Wednesday.
The market is awaiting Friday’s US employment data to gauge the likelihood of a near-term US interest rate hike – economic consensus is for 186,000 jobs to have been added.
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.
In other US data, Chicago PMI for August disappointed at 51.5, missing the 54.1 estimate. Pending home sales month-over-month in July grew 1.3 percent, toppling economic consensus of 0.7 percent growth.
The August ADP employment report – where the July headline figure was also revised up to 194,000 from 179,000 – should help build confidence in the consensus expectation that non-farm employment payrolls may have risen 180,000 in August, ANZ Research said on Thursday morning.
The volatility in regional PMI data continues as evidenced by the 4.3 point drop in the August Chicago PMI, as order backlogs dropped 14.5 points to 41.7. That followed a pattern of soft regional manufacturing data last month and suggests the industrial sector is still struggling, the bank added.
“Easier financial conditions seem to have prompted the Fed to judge that financial markets have become too complacent. It has reacted by sending more hawkish statements ahead of the Fed meeting in September,” Boris Mikanikrezai, a metals analyst at FastMarkets, said.
“We prefer to remain cautious in the near term, especially ahead of Friday’s jobs numbers, which could inject volatility.”
On Thursday, the Caixin Chinese manufacturing PMI for August came in at 50 – a borderline figure which separates expansion or contraction for the sector. The reading was close to forecast of 50.1 but below July’s number of 50.6.
While the figure was more or less within expectations, Caixin Insight Group said the number showed that operating conditions had stagnated across China’s manufacturing sector during August after a marginal improvement in July.
The latest PMI suggests that China’s economic recovery path remains bumpy following an optimistic July PMI figure which had ended 16th straight month of contraction and signalled a renewed upturn in operating conditions faced by Chinese manufacturers.
The Caixin August number, however, contrasted with official PMI data released earlier in the day. China’s official manufacturing PMI for August went back to expansion mode at 50.4. The figure was above expectations of 49.9 and July’s reading of also 49.9.
The official PMI is more focused on large state-owned firms, while the independently surveyed Caixin PMI is closely watched for conditions among the country’s private sector.
China’s services sector in August slowed compared to the previous month, however. The country’s official non-manufacturing PMI for August was at 53.5, down from July’s figure of 53.9. China is counting on the service sector to support its economy following persistent weakness in manufacturing.
Other US data due later today includes Challenger job cuts, final manufacturing PMI, ISM manufacturing PMI, construction spending, ISM manufacturing prices, and total vehicle sales.
In currencies, the US dollar index fell 0.02 percent to 95.96 so far on Thursday.
In other commodities, the Brent crude oil spot price increased 0.3 percent to $47.08 per barrel, and Texas light sweet crude spot price gained 0.09 percent to $44.89 recently in the day.
In equities, the Shanghai Composite fell 0.32 percent to 3.075.71 so far on Thursday.
In other precious metals, silver was last at $18.715/18.735, up $0.045. Platinum was recently at $1,050/1,057, up $3.50, and palladium gained $6 to $672/680 recently on Thursday.
On the Shanghai Futures Exchange, gold for December delivery was last unchanged at 283.30 yuan per gram, and the December silver was flat at 4,173 yuan per kilogram.
(Additional reporting by Dalton Barker)
The post Gold drifts amid wait for US jobs report appeared first on The Bullion Desk.
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