The metal’s rally was triggered by the Federal Reserve’s cautious stance towards higher US rates at its policy meeting last week.
Advertisement
A weaker-than-expected tally of private hiring has added pressure on the Fed to determine just how strong the US job market is as it considers the timing and pace of interest-rate hikes.
Among other precious metals, silver XAG= was down 0.8 percent at $17.29 an ounce, while platinum XPT= was down 0.5 percent at $1,055.28 an ounce and palladium XPD= was down 1.1 percent at $599.22 an ounce.
Federal Reserve policymakers last week left benchmark interest rates unchanged.
Gold for immediate delivery swung between gains and losses before slipping 1 percent to $1,273.74 an ounce at 1:57 p.m.in NY, according to Bloomberg generic pricing.
It rallied sharply last week as the dollar slumped versus the yen, hitting its highest since January 2015 on Monday at $1,303.60 an ounce, but has struggled to maintain those gains.
Gold prices fell on Wednesday, hurt by the recent strength in the USA dollar. Holdings are at their highest since December 2013.
Systematic traders and commodity trading advisors who had previously been selling USA dollars “created a vacuum into which it was easier to take profit”, said Veksler, as they were buying the currency in a falling market.
At 4:10 AM EST, the Euro reached a value over $1.1600, although it dropped back to around $1.1560 by 9:00 AM EST.
This is raising problems for the Fed because central banks around the world are out-of-sync with one another and this is causing conflicts in monetary policies that have impacts in the foreign exchange markets.
Gold held two days of losses as the dollar rebounded on prospects of a U.S. interest-rate increase next month, dimming the metal’s appeal as an alternative investment.
The euro found some support from manufacturing data in the USA and the eurozone. A report by payrolls processor ADP showed on Wednesday that United States private employers added 156,000 jobs in April, well below economists’ expectations and the weakest gain in three years.
Advertisement
“The non-farm payroll report this week may have a neutral effect on gold given that investors are confident that even if the figures are good, there would not be any move by the Fed (to hike rates) until the second half of this year”, said Mark To of Wing Fung Financial Group.
