Gold price deepens pullback from nearly 8-week highs as dollar index stabilizes
London (Aug 3) Gold slipped Thursday but continued to hover near the more than seven-week highs struck to start the week.
Though the economic docket is full Thursday, investors are largely digging in for Friday’s jobs report and any clues there for the likelihood of a follow-up U.S. interest-rate hike yet this year. Although U.S. data has been solid, including a 17-year low for the jobless rate and strong corporate earnings, the economy has shown a lack of inflation that would greenlight a more aggressive Federal Reserve rate response to the recovery.
December gold GCZ7, -0.55% traded down $9.40, or 0.7%, to $1,269.00 an ounce. The contract has fallen since it settled Tuesday at $1,279.40, its highest since June 8.
September silver SIU7, -1.27% slid 22 cents, or 1.3%, to $16.51 an ounce, pulling back from one-month highs hit Monday. A close at this level would mark the white metal’s lowest finish in over a week.
The dollar, as gauged by the ICE U.S. Dollar Index DXY, +0.08% remained near the 15-month lows hit in recent days. It traded just in positive territory early Thursday, up less than 0.1%.
Gold and the U.S. currency unit typically move inversely as a cheaper dollar is beneficial to gold investors using another currency. Both markets are affected by interest-rate policy as higher rates support the dollar but also dull the appeal of nonyielding gold in favor of interest-bearing assets.
The economic calendar is full early Thursday.
“The service-sector ISM survey, as well as factory orders numbers are on tap. Upbeat results echoing broad improvement in U.S. news flow since mid-June may weigh against the yellow metal but lasting follow through might have to wait for Friday’s high-profile payrolls report,” said Ilya Spivak, metals and currency strategist with Daily FX.
In the week’s marquee economic release, Friday’s nonfarm payrolls report, the U.S. is expected to have added 180,000 jobs last month. The unemployment is expected to stay near a 16-year low of 4.4%, according to a MarketWatch survey.
The pace of hiring in the U.S. has already slowed sharply since hitting a postrecession peak of 250,000 a month in 2015, but continues to churn ahead, so far showing few red flags for wage-induced inflation. A report Wednesday from the ADP showed that private-sector hiring remained strong in July as employers added 178,000 jobs, slightly more than expected.
Beyond rates, market statistics have flashed a warning. Global demand for gold fell 14% in the first half of 2017 due mainly to a sharp decline in purchases by exchange traded funds, the World Gold Council said.
As for ETF trading Thursday, the SPDR Gold GLD, -0.21% fell 0.3% premarket, while the iShares Silver Trust SLV, -0.76% fell 0.6% and the VanEck Vectors Gold Miners ETF GDX, -0.26% dropped 0.3%.
Back on Comex, September copper HGU7, -0.50% fell about 2 cents, or 0.6%, to $2.8665 a pound.
October platinum PLV7, +0.27% fell 60 cents, or 0.1%, to $953.20 an ounce. September palladium PAU7, -0.35% slid $3.05, or 0.3%, to $889.15 an ounce. Palladium was on track to snap what had been a win streak of nine sessions.
MarketWatch
