Gold on Wednesday held near two-month lows hit in the previous session, with the dollar firm after upbeat USA data and as investors waited for nonfarm payroll numbers later this week for clues on the timing of a Federal Reserve rate hike. The futures price was down $1.70 or 0.1% at $1,314.80 a troy ounce as of 12:22 AM GMT on Wednesday.
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Fed Chair Janet Yellen said on Friday the case for higher rates was strengthening, though she gave little clarity on the timing of a move. US gold futures were mostly unchanged at $1,315.50 “There is some buying today. people are taking the view that gold is going to fluctuate within a tight range prior to a strong signal from the Fed”, said Richard Xu, a fund manager at HuaAn Gold, China’s top gold exchange-traded fund (ETF).
Mr Wong said the ANZ Business Outlook for August, due out today, is likely to be the main piece of important data for the market but the main event this week is still non-farm payrolls data due out in the USA on Friday, which are expected to show the world’s largest economy added 180,000 jobs in August. Considering that the labour participation rate in the USA has fallen from 66% in 2008 to under 63% now, the official statistic that real unemployment has truly more or less halved over this same period is questionable.
“The US dollar is stronger across the board, as investors have one eye on a possible rate hike later in the year”, Jason Wong, currency strategist at Bank of New Zealand, said in a note. Interest in physically-backed gold exchange-traded funds (ETFs) has also weakened, with some investors anxious about a bigger correction in the market.
August 31 (BusinessDesk) – The New Zealand dollar gained, recovering from an earlier decline, on optimism the domestic economy is continuing to show signs of sturdy growth, while Federal Reserve rate hikes depend on future data.
Traders eagerly anticipate Friday’s August jobs report for a major clue as to whether the Fed will tighten in the coming months.
Ahead of that, ADP employment data, which tracks private payrolls, and the Chicago purchasing managers’ index (PMI) are due later on Wednesday.
Gold for December settlement declined 1% on Tuesday to reach its lowest level in two months.
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“Private payroll data out of the USA will help to give the market some direction”, MKS said in a note. A gauge of the greenback is up 0.6 percent this month. Silver edged higher 0.7 percent to $18.69 an ounce.
