Gold set a new five-year low earlier this morning as beatne down investors turn their attention to crucial Federal Reserve meeting next week.
Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $11.00 or 1.1 percent $1,082.30 per ounce. Earlier, spot gold tumbled to a fresh five year low of $1,077.50.
“Gold is suffering significant losses once again as the week of trading comes to an end,” Commerzbank said. “Good US labour market data are weighing on the gold price – last week saw the lowest number of new jobless claims filed since November 1973.”
Yesterday, the US weekly unemployment figure was 255,000, the lowest figure in over four decades.
The positive data is significant as Federal Reserve Chairwoman Janet Yellen and the Federal Open Market Committee (FOMC) meet next week, with the chairwoman becoming increasingly hawkish in recent weeks on a 2015 initial rate hike.
“Next week, the focus will be on the FOMC meeting – further hints that the Fed is on track for a September rate hike could present downside risks for gold especially given current momentum,” Joni Teves, an analyst at UBS, said.
In the eurozone, EU flash services number disappointed at 53.8, though the manufacturing number was as expected at 53.8.
Elsewhere, Chinese HSBC flash manufacturing data came out at 48.2 against a forecast of 49.8. The number was below the psychologically important 50 level for the first time in 15 months.
Turning to wider markets, Germany’s DAX dropped 0.2 percent, with France’s CAC-40 gaining 0.4 percent. The euro was 0.4 percent softer at 1.0944 against the dollar.
Later the US will release its flash manufacturing data.
As for other precious metals, Comex silver for September delivery fell 2.6 cents to $14.440 per ounce. Trade has ranged from $14.370 to $14.670.
Platinum for October settlement declined $3.50 to $977.60, while the most actively traded palladium contract was at $616.50, down $1.35.
(Editing by Tom Jennemann)
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