Gold slipped about 0.4 percent on Friday afternoon in Europe following the release of a mixed US labour report.
The spot gold price was last at $1,120.20/1,120.50 per ounce, down $4.70 on Thursday’s close – close to its lowest in around one week. Trade has ranged from $1,116.80 to $1,133 so far.
US non-farm payroll employment increased by 173,000 in August, below the 215,000 forecast, but the unemployment rate fell to 5.1 percent from 5.2 percent in the prior month.
Even though the headline number undershot expectations, there were several positives in the report. The June total was revised to 245,000 from 231,000 and the change for July was revised to 245,000 from 215,000. With these revisions, employment gains in June and July combined were 44,000 more than previously reported.
As well, average hourly earnings rose eight cents to $25.09 following a six-cent gain in July. Hourly earnings have risen 2.2 percent over the year.
Gold, which was trading narrowly in positive territory immediately after the release of the report, then moved to negative territory.
“This release is conflicting in nature – it backs arguments for and against a rate rise this month. This has been reflected in both the dollar and gold strengthening after the release of the data, breaking their usual inverse relationship, which reflects the strong speculation surrounding this decision,” Tom Moore, FastMarkets analyst, said.
The jobs report has taken on greater importance ahead of the September Federal Open Market Committee (FOMC) meeting. The Fed is deciding whether to raise the Federal Funds rate for the first time since 2006. The rate has remained at near-zero levels since December 2008.
The CME Group FedWatch – a tool to gauge the market’s expectation of a change in the Fed Funds rate – was steady at 19 percent in September and 36 percent in October.
Elsewhere, Chinese markets will remain closed until Monday after the September 3-5 celebrations to mark the allied victory over Japan in World War II.
“The mood of Chinese traders when they return from holiday on Monday will be key. If the Hang Seng equity index is anything to go by (down 1.5 percent over the last two days, setting a new low for the year) the mood will not be too sunny,” ICBC Standard Bank analyst Tom Kendall said.
In other data today, Japan’s average cash earnings climbed 0.6 percent, which was below what was expected, and German factory orders dropped 1.4 percent, having been expected to decline 0.5 percent. The EU retail PMI at 51.4 was below the previous reading of 54.2.
As for the other precious metals, silver was 20 cents lower at $14.50/14.55 per ounce Platinum at $989/994 was down $16 while palladium at $575/580 edged $3 higher.
“The platinum group metals are still being driven more by their industrial characteristics than their precious metal attributes. With base metals under pressure, platinum and palladium are too,” Kendall noted.
(Additional reporting by Dalton Barker, editing by Mark Shaw)
The post Gold price slips after mixed US jobs report appeared first on The Bullion Desk.
No comments:
Post a Comment