Gold declines even as poor US data sinks dollar

Otmane El Rhazi from The Bullion Desk.

Gold prices closed lower on Wednesday as a weaker dollar couldn’t lend support to the precious metals complex.

Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $9.50 to $1,184.90 per ounce. Trade ranged from $1,179.10 to $1,195.60.

“Thank God for alarm clocks because if the precious metals market were the only keeping you awake we would all be sleeping,” G. Miguel Perez-Santalla, an analyst Heraeus Metal Management, said. “The precious metals remain under pressure at what is one of the quietest beginnings to the month of June I have seen in many years.”

The euro was 0.9 percent stronger at $1.1251 against the dollar, but gold remained in a tight-range even as further US data showed tepid growth.

In US data, private-sector employment increased by 201,000 in May, according to the ADP National Employment Report, which outpaced the 198,000 forecast. Final services PMI in May was 56.2, below forecasts of 56.5, while ISM non-manufacturing PMI in May was 55.7, also under estimates of 57.1.

In Europe, Greek Prime Minister Alexis Tsipras will reportedly meet with European Commission President Jean-Claude Juncker in Brussels on Wednesday evening. The country looks set to make a first repayment of 300 million euros to the IMF on June 5, though, it is unclear how it will pay off the rest of its debt.

In today’s eurozone data, retail sales month-over-month in April was up 0.7 percent, in-line with estimates, while unemployment rate in April stood at 11.1 percent, below predictions of 11.2 percent.

Additionally, final services PMI in May was 53.8, with consensus expecting 53.3.

In US equities, the Dow Jones industrial average and S&P were up 0.5 percent and 0.3 percent respectively.

Meanwhile in Asia, HSBC services PMI in may was 53.5, above forecasts of 53.3.

As for the other precious metals, Comex silver for July delivery was down 2.9 cents at $16.500 per ounce. Trade has ranged from $16.375 to $16.795.

Platinum futures for July delivery on the Nymex were down $9.30 at $1,103.50 per ounce, while the most-actively traded palladium contract was at $759.05, down $9.50.

(Editing by Tom Jennemann)

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