The gold price remained in negative territory on Thursday morning, failing again to benefit from the weaker dollar and stumbling world equity markets.
Spot gold was last at $1,182.20/1,183.00 per ounce, down $9.60 on the previous session’s close and trading in a $12 intraday range so far.
The metal continues to ignore the dollar losing further ground against the euro this morning to 1.1357 amid further indications of a slowdown in the US economy – the ADP non-farm employment change report on Wednesday at 169,000 missed consensus at 199,000.
World equity markets are also struggling – the Euro Stoxx was down 1.43 percent, the Dax 0.92 percent and the CAC 40 1.4 percent – after Asian markets closed in negative territory, with the Nikkei down 1.23 percent and Hang Seng 1.27 percent.
“Yesterday showed what a disappointing market it is at the moment, when the dollar came off heavily and gold was unable to rally at all. The market saw buying on the back of the dollar sell-off but this buying ran into a brick wall,” Marex Spectron’s David Govett said.
Many participants are likely to have moved to the sidelines of 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.
“I would advocate staying side lined,” Govett added. “The market continues to underperform and quite frankly there is neither particular rhyme nor reason to the moves. Volumes and genuine interest are low and will probably stay that way ahead of tomorrow’s figures.”
Gold remains stuck in the $45 range in which it has been trading for the past two months while debates continue over the timing and impact of an interest-rate rise in the US. In April, the metal traded with its lowest level of volatility this year and effectively ended the month unchanged from where it opened.
“Gold is keeping to the range that had been established over the past month or so and it’s hard to see what might encourage a breakout anytime soon,” UBS’ Edel Tully said in a note.
“While data prints out of the US continue to be important, triggering some price volatility around releases, these are unlikely to cause a fundamental shift unless they consistently and substantially differ from market expectations,” she added
Moreover, the metal’s safe-haven status appears to have been hit by positive reports out of Greece and a prospective deal with its creditors on a further bailout.
Due for release today will be weekly unemployment claims, which came in at their lowest in 15 years last week.
According to reports, Greek finance minister Yanis Varoufakis and his Italian counterpart Carlo Padoan are working towards a solution that is essential not just for Greece but for the solidity and robustness of the eurozone.
In data today, French industrial production came in worse than expected at -0.3 percent, as did the trade balance at -4.6 billion euros. The retail PMI for the entire Eurozone was the strongest since July 2014 at 49.5, however.
In the other metals, silver was last down 21 cents at $16.29/16.34 per ounce, platinum was $7 lower at $1,134/1,139 and palladium was unchanged at $788/793.
(Editing by Mark Shaw)
The post Gold price continues soft performance despite US slowdown appeared first on The Bullion Desk.
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