Gold price records longest weekly losing streak since 1999
London (Aug 10) Gold steadied on Monday after two sessions of gains, hurt by the dollar’s rise versus a currency basket after a payrolls report supported expectations that US interest rates could rise as early as September.
Prices of the metal have fallen in the second half of this year on the prospect of rising rates, which would lift the opportunity cost of holding bullion while boosting the dollar.
Gold has found support after sliding below $1,100 an ounce in July, but remains under pressure.
Spot gold was at $1,093.45 an ounce at 10.03a GMT, little changed from late Friday, while US gold futures for December delivery were down 80 cents an ounce at $1,093.30.
"Since Friday, gold has followed the dollar move after the payrolls," ABN Amro analyst Georgette Boele said.
"Gold had a big move down at the end of July, and since then it has just stayed below $1,100," she said. "Gold prices just need a new acceleration point. We still expect the interest rates in the US, and the dollar, to (provide that)." The dollar rose 0.3% against a basket of currencies on Monday, climbing back towards near four-month highs in the wake of Friday’s employment data.
US nonfarm payrolls increased by 215,000 in July, less than the 223,000 rise that economists had expected, but still seen in line with a tightening labour market. Payrolls data for May and June was revised to show 14,000 more jobs created than previously reported.
"July nonfarm payroll data help firm the case for a September rate hike," Barclays Capital said in a note.
"Global physical demand in Q2 15 is the weakest it has been in two years, and demand in China and India has failed to pick up due to lower prices. We maintain our conviction that Q3 15 will be the weakest quarter for gold." Gold fell for a seventh week in a row last week, its longest such retreat since 1999, having struggled to pull away from a five-and-a-half-year-year trough of $1,077 reached in July.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, slipped to their lowest since September 2008 at 21.47-million ounces on Friday.
Spot platinum was up 0.5% at $964.25 an ounce and palladium was up 0.2% at $599, both still close to last week’s multi-year lows. Silver was up 0.6% at $14.92 an ounce.
Source: Reuters
