The gold price was steady on Thursday morning while uncertainties over the timing of a US rate rise and Friday’s key non-farm payrolls data keep investors on the sidelines.
Spot gold was last at $1,132.50/1,133 per ounce, little changed from Wednesday’s close. Trade has ranged narrowly from $1,131.50 to $1,134.50 so far.
“The rebound in equity markets and the positive-ish ADP employment data saw gold out of favour on Wednesday, however the metal still continues to see an underlying level of support as global markets swing wildly session-to-session,” MKS said in a note.
Global equities are recovering – yesterday the Euro Stoxx 50 closed up 0.3 percent and the Dow closed up 1.8 percent, shaking off disappointing US data including ADP employment numbers and factory orders.
“The markets may have two days of respite, while Chinese markets are closed, as long as the government does not take advantage of the closed markets to announce further monetary policy changes,” FastMarkets head of research William Adams said.
Chinese markets are closed on September 3-5 to mark the 70th anniversary of the allied victory over Japan in World War II.
“Leading into tomorrow’s NFP release $1,125 is an important support for the metal if it is to break higher to test $1,150,” MKS said.
The non-farm payrolls data should provide more clues on whether growth in the US can sustain higher interest rates.
Market participants will also look to today’s ECB meeting for its “assessment of the latest developments on the financial markets and how it will react to them”, Commerzbank noted.
“Given the unfavourable inflation outlook – the rate of inflation in the eurozone is still well below the ECB’s long-term two-percent goal and long-term inflation expectations have declined again of late – ECB president Draghi may threaten to top up or extend the bond purchasing programme in an attempt to verbally weaken the euro. This could give the gold price in euros a boost,” the bank added.
In a busy day for data, services PMI across Europe and EU retail sales were mixed. US data due later includes Challenger job cuts, the trade balance, initial jobless claims, two sets of services PMI and natural gas storage data.
Meanwhile, inflows into gold ETFs continued – in the funds tracked by FastMarkets, holdings have increased to 1,534.11 tonnes.
In the other precious metals, silver was little changed at $14.68/14.72 per ounce. Platinum at $1,010/1,015 edged $2 lower while palladium at $584/589 climbed $2.
“Silver continues to watch from below but is fairly steady and the PGMs look more like the base metals in that they have paused, albeit nervously, below recent resistance,” FastMarkets’ Adams noted. “The industrial precious metals are likely to take a cue from the base metals should base metals rally.”
(Editing by Mark Shaw)
The post Gold steady, traders on sidelines ahead of US jobs report appeared first on The Bullion Desk.
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