Gold held the first advance in ten days as investors looked to the release of U.S. data this week, including monthly payrolls, that’ll shape the thinking of Federal Reserve policymakers on whether to raise interest rates in the months ahead.
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Spot gold was last at $1,214.90-1,215.20 per ounce, up $1.80 from Wednesday’s close.
Spot gold is biased to revisit its May 30 low of $1,199.60 per ounce, as it has failed to break a resistance at $1,219, Reuters technical analyst Wang Tao said.
MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS fell 0.3 percent. Fed Chair Janet Yellen said on Friday that the central bank should hike rates “in the coming months” if economic growth picks up and the labour market continues to improve.
A sharp late-year dump of net-long speculative gold positions coincided with the Federal Reserve’s first interest-rate hike in almost a decade.
Data on Wednesday added to the case for higher USA rates.
In the week to May 24, net long positions of financial speculators in gold declined by 56,000 to 156,500 contracts. Rate increases can also put pressure on gold as commodities don’t pay interest, sending investors in search of higher yields in a rising-rate climate.
“Gold prices lifted for the first time in ten days as the market chose to focus on the weaker side of United States data”, Australia & New Zealand Banking Group said in a report, noting that U.S. manufacturing indicators disappointed.
St. Louis Fed President James Bullard said on Monday global markets appear to be “well-prepared” for a summer interest rate hike from the Fed, although he did not specify a date for the policy move. “In other words, the gold price could still fall by around another $50”.
On the Shanghai Futures Exchange, gold for December delivery was unchanged at 258.80 yuan per gram and December silver was flat at 3,587 yuan per kilogram.
Still, while it’s easy to blame the Fed’s latest rate-hike promises for the monthly loss, “after the price jump and new investing surge of 2016, profit-taking is the more likely culprit, combined with bullish fatigue”, said Adrian Ash, head of research at BullionVault.
Spot silver XAG= was headed for its biggest monthly loss since September 2014, down more than 10 percent. That was its lowest since February 17, pressured by strength in the dollar and a rise in global share prices, increasing investors’ risk appetite and leaving gold set for a 6.3 percent decline in May.
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Against the yen, the dollar advanced 0.2 percent to 111.300. July copper HGN6, -1.47% fell 1.9 cents, or 0.9%, to $2.096 a pound, down 8.2% for the month. Trading ranged at $1,211.30-1,215.80 so far.
