Gold price down a third day as jobs report’s wage data awaited

March 9, 2018

London (Mar 9)  Gold prices headed toward their third decline in a row on Friday as a leading dollar index strengthened and investors awaited the latest monthly data on U.S. employment for hints on the pace of the Federal Reserve’s interest-rate increases.

April gold GCJ8, -0.17% fell $1.30, or 0.1%, to $1,320.40 an ounce, sliding without interruption since closing Tuesday at its highest level Feb. 16. The contract is on track to post a 0.2% decline for the week, leaving its year-to-date gain at just 0.5%.

The ICE U.S. Dollar Index DXY, +0.13%  rose 0.1% to 90.24. Commodities priced in dollars often trade inversely with the buck, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.

The wait was on for the February jobs report, due for release at 8:30 a.m. Eastern, with wage growth in the spotlight. Economists polled by MarketWatch are expecting average hourly earnings to have risen 0.2%, after a 0.3% gain in January, with an overall jobs gain of 220,000 compared with a jump of 200,000 in the previous month.

“Survey data hints that wage inflation is likely to remain elevated, stoking Fed rate hike speculation and giving the dollar a further lift,” said Ilya Spivak, currency and commodities analyst with Daily FX. “Gold might face outsized losses, however, as its anti-fiat and alternative store-of-value credentials turn into liabilities.”

That investors were apprehensive was understandable after January’s upbeat jobs report triggered a meltdown for stocks last month. Rising inflation could also add pressure on the Federal Reserve to speed up its rate rises, which could strangle the stock market. Gold, in turn, could attract hedging demand against inflation.

Markets appeared to largely push aside news that President Trump has accepted an invitation to meet North Korea’s leader. The meeting could be held as early as May, according to a senior South Korean official who made the announcement at the White House on Thursday evening. But the news did give Korean stocks a boost.


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