The gold price appeared to consolidate the previous session’s gains in early morning London trading on Wednesday but remains vulnerable below the $1,200 mark.
Spot gold was last seen at $1,191.70/1,192.50 per ounce, down $1.80 on the previous session, when the metal retested the psychological $1,200 level.
“The precious metals have got some lift of late, helped by weaker treasuries, bonds and the weaker dollar, but with the gold price below $1,200 it is hardly looking that bullish,” FastMarkets analyst William Adams said.
The metal moved higher on Tuesday on news that the US trade deficit of $51.4 billion in March was much larger than the expected $41.2 billion and the worst reading since October 2008. The increase has been attributed to a surge in imports through West Coast ports – operations there have normalised following months of labour disputes – which has led to speculation that the move may see first quarter GDP revised downwardly in the next estimate.
As a result, the environment remains favourable on Wednesday, the dollar has lost ground against the euro this morning at 1.1235 and oil prices continue to rise to fresh 2015 highs on concerns surrounding a disruption to crude exports from Libya.
Still, so far – gold appears not to be interested, though a large number of participants have likely side-lined themselves ahead of Friday’s blockbuster US jobs report, which is forecast at 231,000 in April after an unusually weak reading of 126,000 in March.
The data may provide clues on when the US Federal Reserve will begin to normalise monetary policy, particularly as the Fed recently shifted its stance almost exclusively to data dependency, citing in particular jobs and inflation data.
In data today, the HSBC services PMI at 52.9 was largely in line with analysts’ forecasts, while the Spanish, Italian and French numbers bettered expectations at 60.3, 53.1 and 51.4 respectively, which ultimately was reflected in the overall Eurozone figure of 54.1. The German PMI however fell short at 54.0.
Still to come will be the ADP non-farm employment change figure, as well as the preliminary unit labour costs and nonfarm productivity numbers.
In other metals, silver at $16.43/16.48 per ounce, was down ten cents on the previous session, where it came close to one month highs. In the PGMs, platinum was last seen down $2 at $1,140/1,145 per ounce, while palladium dropped back marginally from the two month highs hit on Tuesday and was last seen at $788/793 per ounce, up $2.
(Editing by Kathleen Retourne)
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