Investors lack conviction, gold stagnant while dollar gains

Otmane El Rhazi from The Bullion Desk.

Gold prices were directionless in the US on Thursday morning while investors await tomorrow’s monthly US jobs report.

Gold for December delivery on the Comex division of the New York Mercantile Exchange was last down $2.0 or 0.2 percent at $1,083.60 per ounce. Trade has ranged narrowly from $1,082.70 to $1,086.40.

The US non-farm employment report for July, due for release tomorrow, is one of the last key labour indicators that the Federal Reserve can use to gauge the status of the US economy before deciding whether to raise rates or not in September.

“We expect conditions to be fairly quiet on Thursday, ahead of Friday’s key nonfarm payroll report,” Edward Meir, an analyst at INTL FCStone, said in a report late last night.

US interest rates have fallen close to zero since 2006; an increase would signal to market participants that the Fed is seeing enough growth to ignore a lack of inflation, which has undershot the Fed’s target of two percent for more than three years.

The forecast calls for 220,000 jobs to have been added in July after the June reading came in at 224,000. In a precursor to that report on Wednesday, the ADP non-farm employment change at 185,000 was well short of forecasts of 216,000.

In data today, US weekly unemployment claims at 270,000 were below the forecast of 273,000, while Challenger job cuts in July rose 125.4 percent, outpacing the previous month’s gain of 42.7 percent.

In other global economies, Japan’s leading indicators were slightly stronger and German factory orders climbed 2.0 percent, which was up strongly from expectations for a 0.4-percent rise.

Turning to equities, Germany’s DAX and France’s CAC-40 were up 0.1 percent and 0.4 percent respectively, while the euro was 0.2 percent softer at 1.0889 against the dollar.

As for other precious metals, Comex silver for September settlement rose 3.2 cents to $14.585 per ounce. Trade has ranged from $14.490 to $14.590.

Platinum for October delivery fell 60 cents to $950.30 per ounce, while the most actively traded palladium contract was at $600.10, up $7.10.

 

(Editing by Mark Shaw)

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