Gold Slides to Two-Month Low
New York (Mar 5) Gold prices fell to their lowest level in two months on Thursday, as investors pulled back from bets on the metal ahead of key U.S. employment data.
Gold for April delivery, the most actively traded contract, closed down 0.4% at $1,196.20 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the lowest closing price for the precious metal since Jan. 2.
Investors are awaiting Friday’s U.S. nonfarm payroll data, which many believe offers the clearest snapshot of how the economy is doing. Strong growth in jobs would bolster the case for the Federal Reserve to raise interest rates for the first time in nearly a decade, a move that may weigh on gold, which struggles to compete with yield-bearing investments when interest rates rise.
“I don’t think you want to be too aggressive going into tomorrow,” said Ira Epstein, a strategist at the Linn Group. “This is a very important number.”
The number of Americans seeking first-time unemployment benefits rose last week to the highest level since May, but harsh winter weather may be to blame for the recent spike, a report from the Labor Department revealed Thursday.
The data come after a separate set of numbers released Wednesday by payroll processor Automatic Data Processing Inc. and forecasting firm Moody’s analytics showed business hiring increasing at a modest pace in February.
“There’s been a great deal of conflicting data lately,” said George Gero, a senior vice president with RBC Capital Markets Global Futures. “Traders are hoping to see something tomorrow that would definitely move the Fed one way or another.”