Gold prices closed at the highest price in three weeks as the bear market ebbs and debate continues over the appropriate timing of a US interest rate rise.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was rose $10.0 to $1,104.10, the highest price since July 20. Trade ranged from $1,089.0 to $1,108.50.
“Commodities entered squeeze mode following weeks of slowing downside momentum,” Triland Metals said. “The overall sentiment was way too unanimously bearish for too long; today has taken some edge of that now.”
On Friday, June US unemployment showed 215,000 added jobs, slightly below the forecast of 220,000. The unemployment rate was steady at 5.3 percent with wages seeing a modest gain of 0.2 percent.
The figure was a key driver of prices and policy as the Federal Open Market Committee (FOMC) has become increasingly hawkish in recent weeks.
“I think the point of ‘liftoff’ is close,” Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, said today. “The economy has made great gains and is approaching an acceptable normal … conditions are no longer extraordinary.”
However, there is still some apprehension from Fed members as inflation continues to linger below the Fed’s target of two percent.
“The interesting situation in which we are is that employment has been rising pretty fast relative to previous performance and yet inflation is very low,” Federal Reserve Vvce chairman Stanley Fischer said in an interview on Bloomberg TV. Fischer cited cheaper oil and falling raw materials as reasons for low inflation, but these factors will eventually stabailise.
Bulls returned after piling out of gold the past two months with net long fund position (NLFP) in gold increasing by 5,435 contracts (or 19 percent) to 29,900 from 24,465 contracts in the week ending August 4, according to the latest CFTC statistics.
The increase in the net length for the first time in six weeks was mainly driven by short-covering (-3,620 contracts) that was further reinforced by long accumulation (+1,815 contracts). The net length is down about 74 percent in the year to date.
In global data and news, Japan was mixed with bank lending rising 2.6 percent, the economy watchers sentiment was better than the previous month, but consumer confidence edged lower.
Meanwhile in the US, July Labor Market Conditions Index month-over-month was 1.1, above the previous reading of 0.8.
Turning to US equities, the Dow Jones industrial average and S&P were up 1.3 percent and 1.2 percent respectively, while the dollar was 0.3 percent weaker at $1.0999 against the euro.
As for other precious metals, Comex Silver for September settlement was last down 4.7 cents to $15.245 per ounce. Trade has ranged from $14.705 to $15.375.
Platinum for October delivery was last down $1.30 to $988.50 per ounce, while the most actively traded palladium contract was at $607.65, up $1.45.
(Editing by Tom Jennemann)
The post Gold closes at 3-week high, Fed members disagree over September hike appeared first on The Bullion Desk.
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