Gold futures slip as markets await U.S. jobs data
San Francisco (Feb 6) Gold futures edged lower on Thursday, locked in a fairly tight trading range, with traders turning their attention to a rally in U.S. equities, comments from the European Central Bank’s Mario Draghi and a fall in U.S. jobless claims. Investors are anxiously awaiting January jobs data, scheduled to be released Friday morning.
Gold for April delivery leaned lower, losing $1.30, or 0.1%, to $1,255.60 an ounce on the Comex division of the New York Mercantile Exchange. March silver added 8 cents, or 0.4%, to $19.885 an ounce, extending its 2% gain from a day earlier.
Gold gave up all gains made during Mario Draghi’s speech, said Naeem Aslam, chief market analyst at AvaTrade.
The ECB on Thursday left its interest rates unchanged. Draghi said the ECB remains ready to take “decisive action” if needed, but the central bank’s accommodative monetary policy should help to build support for domestic demand.
As for Friday’s U.S. jobs data: “If we get a good number, then the odds are high that the [U.S. Federal Reserve] may become even more aggressive in withdrawing their stimulus package, and that could certainly impact gold,” said Aslam. “If we do see an aggressive approach by the Fed, the selloff in equities could continue again and this could be positive for gold. At the same time, we are seeing consistent improvement in physical demand for gold, which is also providing a support for the price.”
Economic data Thursday showed that the number of people who applied to receive unemployment benefits in the last week of January fell by 20,000, signaling that the U.S. labor market continues to gradually improve. Upbeat economic data tends to dull gold’s investment appeal.
Other data Thursday showed that the U.S. trade deficit rose to a seasonally adjusted $38.7 billion from a slightly revised $34.6 billion in November. Productivity in the fourth quarter, meanwhile, grew at a 3.2% annual rate. Economists surveyed by MarketWatch had forecast a 3.4% growth rate.
On Wednesday, gold futures caught a lift from weakness in U.S. stocks, which traded mostly lower following a weaker-than-expected report on private-sector employment.
There’s “no crystal ball” regarding the short-term price outlook for gold “and as ever is nigh impossible to predict price movements,” said Mark O’Byrne, executive director at GoldCore. “However, very loose monetary policies are set to continue and if history is any guide, paper currencies will continue to lose value in the long term. This makes owning gold important from a diversification perspective.”
Elsewhere in metals trading Thursday, April platinum fell $4.30, or 0.3%, to $1,375 an ounce while March palladium gained $3.70, or 0.5%, to $710.80 an ounce. High-grade copper for March tacked on 4 cents, or 1.3%, to $3.23 a pound.
Metals-mining shares were mixed, with the Philadelphia Gold and Silver Index nearly flat and the NYSE Arca Gold Bugs index down 0.4%.
The SPDR Gold Trust exchange-traded fund fell 0.1%.
(Source: MarketWatch)
