The gold price saw continued downward pressure Wednesday in the US, although investors are tentative to declare a strong direction until Friday’s blockbuster jobs report.
Gold for December settlement on the Comex division of the New York Mercantile Exchange was last down $5.50 or 0.4 percent to $1,311.0 per ounce – the lowest since June 23.
With the dollar trading at a two-week high – last trading at 96.02 on the dollar index – the yellow metal has seen consistent pressure. The rally started early last week with Federal Reserve officials universally optimistic on how the US economy is progressing moving into the second half of the year.
Vice chairman Stanley Fischer said the labour market was approaching full-employment and signalled that a September rate hike was possible.
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.
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.
“Small, continued pressure on longs in gold as ADP figures were close to expected and traders are unwilling to commit prior to Friday’s big jobs number, which could bolster Fed speakers making a case for raising rates,” George Gero of RBC Wealth Management said.
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 (less safe-haven flows) and rising Fed tightening expectations due to a higher dollar and US real rates,” Boris Mikanikrezai, metals analyst at FastMarkets, said.
In other 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.
Turning to American markets, the Dow Jones industrial average and S&P were each down 0.5 percent, while the dollar softened 0.1 percent to $1.1154 against the euro.
As for other precious metals, Comex silver for September delivery rose 3.8 cents or 0.2 percent to $18.615 per ounce. Trade has ranged from $18.520 to $18.795.
Platinum for October settlement fell $4.0 or 0.4 percent to $1,052.60 per ounce, while the most active palladium contract stood at $669.90 per ounce, down $8.05.
(Editing by Tom Jennemann)
The post Gold slips to 2-mth low, US jobs data due Friday appeared first on The Bullion Desk.
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Source: Bullion Desk News
