Gold prices declined during Wednesday’s US trading session after strong US data provided support to equities and the dollar.
Gold for December delivery on the Comex division of the New York Mercantile Exchange fell $5.10 to close at $1,085.60 per ounce. Trade ranged from $1,082.0 to $1,091.70.
In a mostly positive US data day, ISM non-manufacturing PMI in July was 60.3, besting the forecast of 56.3, while final services PMI in the same month was at 55.7, above projections of 55.2
However, US non-farm employment change in July was at 185,000, below forecasts of 216,000. The US trade balance in June was -43.8 billion, a touch above the -42.8 billion estimate.
Investors now turn to Friday’s US employment report for July, with current predictions estimating 224,000 jobs added last month. It is one of the last few major data releases before the Federal Open Market Committee (FOMC) meets in September.
“The current financial markets do not favour investment in gold regardless of whether it seems oversold or cheap,” Triland Metals said. “US figures towards the end of this week may cause short term gyrations but gold is unlikely to ever find much of a significant bid again until inflation is well and truly back on the map.”
Expectations of an initial rate rise are growing with Atlanta Federal Reserve President Dennis Lockhart stating that the economy would need to have a “significant deterioration” for him not to support a rate hike next month.
The comments from Lockhart boosted the dollar to four months highs, with the greenback currently trading 0.3 percent softer at $1.0911 against the euro.
ETF outflows have also continued for more than two weeks – holdings in the funds tracked by FastMarkets fell another 2.65 tonnes to 1,525 tonnes on Tuesday, the lowest since February 2009
Meanwhile in other global economies, the Chinese Caixin services PMI was better than expected at 53.8 and the EU final services PMI at 54 was slightly better than the expected 53.8. But EU retail sales at -0.6 percent missed the expected -0.1 percent.
Turning to equities, the Dow Jones industrial average and S&P were up 0.1 percent and 0.4 percent respectively.
As for other precious metals, Comex silver for September settlement rose 1.8 cents to $14.575 per ounce. Trade has ranged from $14.465 to $14.675.
Platinum for October delivery fell $7.50 to $951.0 per ounce, while the most actively traded palladium contract was at $594.25 per ounce, down $4.35.
The post Gold trends lower, investors await US employment report appeared first on The Bullion Desk.
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