Gold futures on the COMEX division of the New York Mercantile Exchange rose on Tuesday as technical trading and a stronger USA dollar put pressure on the precious metal.
Advertisement
United States stocks slipped on Tuesday after strong USA economic data stoked concerns about the impact of a potential Federal Reserve interest rate hike this year and a drop in technology shares, while European stocks and the dollar hit multi-week highs.
With London markets closed on Monday for a national holiday, Tuesday marked the first full day of trading there since U.S. Federal Reserve Chair Janet Yellen and Vice Chair Stanley Fischer left the possibility of a near-term rise in U.S. rates on the table, boosting the dollar.
“It’s hard to move until we see the jobs figures, after Fischer stressed that the August report would be a key factor, and that an interest rate hike could follow good numbers”, said Kumiko Ishikawa, senior FX analyst at Gaitame.Com Research Institute in Tokyo.
An upbeat payrolls report would reinforce the view that a USA rate hike may be on the cards, after Fed officials sounded a hawkish note at a meeting last weekend.
The dollar rose to a three-week high against the yen on Monday after senior Federal Reserve officials bolstered expectations that US interest rates will rise soon. Employers are expected to have added 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters.
Brent crude futures were up 17 cents at $49.43 a barrel, US crude added 21 cents to $47.19, while gold slipped 0.2 percent at $1,320.79 per ounce.
The dollar strengthened following the ADP data and gold prices dipped sharply with another test of support below the $1,310 level.
The dollar wavered against the yen and euro on September 1, its advance put on hold ahead of the closely-watched USA non-farm jobs report on September 2 which is expected to shape the market’s near-term interest rate expectations.
The metal on Thursday had touched its lowest since June 24 at $1,301.91 and was on track to end the week lower for the second straight week. “We have seen no panic from either exchange-traded product investors, where holdings are up on the month, while hedge funds have only reduced net longs by 8% from the July peak”.
Silver rose 1 percent to $18.77 an ounce. Core PCE has been stuck at 1.6 percent for a few months now, with inflation expectations among the general public as well as in markets going nowhere.
The dollar index rose 0.3% on Tuesday, continuing to trade at a more than two-week high on higher prospects of a rate increase.
Advertisement
Platinum has fallen 7.8 percent in August and palladium 3.6 percent.
