Gold Trades Lower for Third Day as Investors Await Jobs Data

SINGAPORE (Oct 22)  Gold held losses for a third day before U.S. employment data that may provide clues on the timing of a reduction in stimulus by the Federal Reserve. Palladium rose a fifth day, the longest rally in a month.

Bullion for immediate delivery traded 0.1 percent lower at $1,314.70 an ounce by 8:36 a.m. in Singapore, after gaining 3.5 percent last week in the best showing in two months. Palladium, the only metal that has advanced this year, climbed as much as 0.4 percent to $752.35 an ounce, the highest since Aug. 27.

U.S. September jobs data will be released today after being postponed because of a 16-day partial government shutdown that started Oct. 1 as lawmakers clashed over passing a budget and lifting the nation’s borrowing limit. The fiscal strife in Washington will probably delay the central bank’s paring of its monthly asset purchases, Fed Bank of Chicago President Charles Evans, an advocate of monetary stimulus, said in a CNBC interview yesterday.

“Bullion edges lower in lackluster trading ahead of the U.S. nonfarm payrolls release,” Howard Wen, an analyst at HSBC Securities (USA) Inc., wrote in a note. “The data will likely hold implications to the near-term direction of bullion as a disappointing jobs report may boost gold prices while a better-than-expected report may be a drag on prices.”

Fed Tapering

Gold slumped 22 percent this year on expectations the Fed will slow its $85 billion-a-month of bond buying as the economy improves. Fed policy makers, who meet again Oct. 29-30 after unexpectedly maintaining stimulus at the last meeting, will make the first cut to buying in March, according to the median estimate of 40 economists surveyed by Bloomberg Oct. 17-18. A poll last month forecast the first reduction in December.

Gold for delivery in December lost 0.1 percent to $1,314.60 an ounce on the Comex in New York. The trading volume was 81 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

Spot palladium was at $751.45 an ounce, taking this year’s advance to 6.7 percent. China’s palladium imports and passenger-vehicle sales climbed to eight-month highs in September, while labor disputes disrupted supplies from second-largest producer South Africa.

Silver dropped 0.2 percent to $22.1875 an ounce, while platinum was little changed at $1,433.53 an ounce.