Gold price drops as robust US economic figures dampen safe-haven appetite

New York (Sept 6)  Gold prices extended their declining streak on Friday, as strong US economic figures boosted risk-on sentiment, weighing on safe-haven assets, Reuters reported.

By 8:23 am GMT, spot gold dropped by 0.78% to $1,507.13 per ounce, having fallen by 1% to $1,504.30 per ounce, the lowest since 23 August, while US gold futures fell by 0.64% to $1,515.80 per ounce.

August’s robust data on US private sector payrolls and services sector led gold prices to fall by 2% on Thursday, sending the yellow metal on track for its second successive weekly losses.

“We now expect a lot of volatility in the gold markets,” Singapore-based dealer GoldSilver Central managing director Brian Lan was quoted by Reuters.

In the meantime, markets are awaiting the monthly report of US payrolls due later in the day, which would offer an insight into the labour market’s health.

News that Washington and Beijing agreed to hold high-level negotiations early in October gave a push to riskier assets, raising hopes for a thaw in the longer-than-a-year bitter trade tensions.

Moreover, “softer geopolitical overtones from Hong Kong and Brexit further alleviated risk-off sentiments,” a note by Phillip Futures analyst Benjamin Lu was quoted by the news agency.

Nevertheless, as long as worries of a global recession, mounting geopolitical risks and monetary easing trend among central banks carry over into the third quarter, gold “will remain vigorous,” Lu said.

The yellow metal jumped by around 18% this year, as the flaring trade war fanned worries about an incoming global economic downturn as well as prompted major central banks worldwide to cut their interest rates.

Global Reports  Goods and Metals  Global Markets brief  Global Economy 

Mubasher