The gold price tested three-and-a-half-month lows on Thursday morning ahead of the release of the monthly US jobs report.
Spot gold was last at $1,165.20/1,166.00 per ounce, down $2.70 on the previous session’s close – earlier it came within 20 cents of matching its lowest since March 19 and is heading for its fourth consecutive lower session.
“Gold is suffering – prices are testing support,” FastMarkets analyst William Adams said. “Silver is pressing lower too, while the PGMs are holding up better – palladium is bucking the trend by rallying. The PGMs are oversold so a rebound is not surprising but for gold and silver the combination of investors not looking for gold as a safe haven and a stronger dollar seems to be weighing on prices.”
Platinum was last down $2 at $1,077/1,082 per ounce, palladium was up $1 at $693/698 and silver climbed nine cents to $15.61/15.66.
The main focus today is on this afternoon’s US employment report, which is predicted to show that the world’s largest economy created 231,000 new non-farm jobs in June.
According to Wednesday’s ADP report, the US added 237,000 private-sector jobs last month, beating expectations of 218,000.
With the Greek situation failing to bolster interest in gold, investors will instead look for clues in the jobs report as to the state of the US economy and what changes may lie ahead in monetary policy.
Better-than-expected data may well prompt the Fed into normalising monetary policy sooner than expected, pushing investors away from gold and into more yield-bearing assets such as bonds.
Investors are also watching Greece despite the lack of lift it has been providing to precious metals. The Greek people will go to the polls on Sunday to decide whether or not to accept its creditors’ apparently final proposals. No talks on debt relief are likely until after the referendum takes place.
Gold has confounded widely held assumptions that it would rise in a flight to safety – it has fallen around two percent this week, around 1.5 percent in June and more than six percent from its May peak of $1,232.50 per ounce.
“Either the market isn’t pricing in the implications of what is happening and may well do at a later date or the crisis has already been priced in and this is about as good as it gets for gold ” Mitsubishi’s Jonathan Butler told FastMarkets earlier this week.
The US unemployment rate, average hourly earnings and factory orders are also due.
In PGM-related data on Wednesday, vehicle sales in the US slowed more sharply than anticipated in June at 17.11 million on a seasonally adjusted and annualised basis, down 3.4 percent on May.
“The big US auto manufacturers are even more optimistic about the second half year, pointing to robust demand for SUVs and trucks. This should benefit palladium above all in this gasoline-heavy US market, even though its price plunged by 14 percent in the first six months of the year,” Commerzbank said.
(Editing by Mark Shaw)
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