Gold prices tick higher in early Asia as investors buy on dips
New York (May 8) Gold prices ticked higher on Friday with investors buying on recent dips and monitoring China and the U.S. on interest rates.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery rose 0.09% to $1,183.30 a troy ounce.
Elsewhere, silver for July delivery was flat at 16.297 a troy ounce. Copper for July delivery eased 0.04% to $2.916 a pound.
Also today, China's April trade data are due but there's no fixed time for this release. The data may provide yet more evidence of weak global and domestic conditions. Expectations are for a 2.4% gain in exports in April year-on-year, and a 12% drop in imports for a trade surplus of $39.45 billion. The surprising 15% slide in exports and 12.7% drop in imports in March pointed to an economic slowdown, which has apparently dragged into the second quarter of the year.
Overnight, gold futures fell mildly on Thursday amid stronger than expected U.S. jobless claim data, as metal traders awaited Friday's critical monthly employment report.
Gold moved lower after the U.S. Department of Labor said in a weekly report that initial jobless claims last week rose modestly by 3,000 to 265,000.
A week earlier initial claims unexpectedly fell by 34,000 to 262,000 defying expectations for a higher reading after the figure neared 300,000 for the week ending April 18. A number of readings in the report neared a 15-year low, including the four-week average for initial claims, which dropped by 4,250 to 279,500.
Analysts have forecast a 224,000 uptick in nonfarm payroll jobs for April when the Labor Department releases its monthly jobs report on Friday morning. In March, nonfarm jobs increased by a tepid 126,000, as employment levels in major industries such as financial activities, government, manufacturing and wholesale trade remained relatively unchanged.
Fed chair Janet Yellen is hoping to avoid a "taper tantrum," that occurred under her predecessor Ben Bernanke in 2013 when he hinted that the U.S. central bank could begin reducing the amount of long-term bond purchases it made through its quantitative easing program.
Bernanke initiated three rounds of quantitative easing starting in November, 2008, to keep interest rates low in order to stimulate economic growth. A taper tantrum could rattle markets with sudden, sharp upward rate movements.
The precipitous fall in government bond prices, meanwhile, has weighed on gold, which is not attached to interest rates.
Source: Investing.com
