Gold futures edged higher on Thursday morning in the US although investors are holding back until European and US monetary action becomes clearer.
Gold for August settlement on the Comex division of the New York Mercantile Exchange rose $3.80 or 0.3 percent to $1,218.50 per ounce. Trade has ranged from $1,213.30 to $1,220.0.
Earlier this morning, the European Central Bank (ECB) left its nominal interest rates unchanged as expected. President Mario Draghi called for swift reforms to spur growth but cautioned against using another round of monetary easing to achieve such results.
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 the interim, a lack of dollar volatility is keeping the precious metals in a confined range – the dollar index was last at 95.23, near a multi-month high.
“The ECB left interest rates unchanged. With the market expecting a Fed tightening move as early as mid-June, this news from the ECB (although expected), should be lifting the dollar,” Kitco Metals global trading director Peter Hug said.
“The dollar, however, continues to post a weaker tone, which bodes well for the metals complex,” he added.
In a preview of Friday’s jobs report, the ADP non-farm employment change for May at 173,000 was in line with expectations of 174,000. The official figure is expected to show roughly 160,000 jobs were added in May.
US data has grown in importance since the Federal Open Market Committee (FOMC) reaffirmed that it is prepared to raise rates as soon as this month if the labour market continues to show improvement while inflation and wages tick higher.
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 CME GROUP FedWatch
“After the FOMC decision, the focus is likely to turn to the Brexit vote, which is likely to heat up in the final run-up to the vote,” FastMarkets’ William Adams said.
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.
Later, natural gas storage and crude oil inventories are slated for release.
Turning to international markets, Germany’s DAX and France’s CAC-40 were little changed while the dollar edged 0.1 percent lower to 1.1193 against the euro.
As for other precious metals, Comex silver for July delivery gained 8.3 cents or 0.5 percent to $16.010 per ounce. Trade has ranged from $15.925 to $16.065.
Platinum for July settlement ticked up $2.0 or 0.2 percent to $973.90 per ounce while palladium at $544.90 was down $1.85 or 0.3 percent.
(Editing by Mark Shaw)
The post Gold steady, market seeks more clarity after ECB holds fast appeared first on The Bullion Desk.
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Source: Bullion Desk News
