Gold rose for the fourth consecutive day but a sharper move might have to wait until the release of the US non-farm employment report on Friday.
Gold for December delivery on the Comex division of the New York Mercantile exchange was last up $7.80 or 0.7 percent to $1,140.30 per ounce. Trade has ranged from $1,133.80 to $1,144.30.
“Gold has been closely tracking changes in Fed policy expectations of late and we expect this influence on price action to continue up ahead,” Joni Teves, analyst at UBS, said. “The link is likely going to become more acute in the next two weeks as the September [Federal Open Market Committee] meeting draws near.”
The US job’s report is one of the last crucial data figures for the FOMC ahead of September 16-17 meeting.
Despite unemployment falling to 5.3 percent, labour participation rate – the percent of available workers currently employed compared to the overall population – was at the lowest levels in four decades, according to the July reading.
Chinese instability, especially in the country’s various stock indexes, has led market participants to overwhelming dismiss an increase to the Fed Funds rate – the rate has been at near zero levels since December 2008.
The CME Group FedWatch – a tool to gauge the market expectation’s of a rate hike – currently stood at 32 percent probablilty of a hike in two weeks. The index has fallen precipitously during the summer months.
“On balance, the importance of this week’s employment report is somewhat elevated given the lack of clearer signals from the recent Jackson Hole symposium – comments from Vice Chairman [Stanley] Fischer seemed to focus on trying to keep the Fed’s options open,” Teves added.
Overnight, China’s official purchasing managers’ index (PMI) fell to 49.7 in August from 50.0 in July, its weakest reading in three years. The official non-manufacturing PMI also showed a cooling in the Chinese services industry, falling to 53.4 in August from 53.9 in July.
Caixin final manufacturing PMI – a measure of smaller companies – was at 47.3, above its preliminary reading of 47.1 but down from 47.8 in July and its lowest since March 2009.
The Caixin services PMI at 51.5 missed the forecast of 53.9 and was lower than its previous reading of 53.8.
The Shanghai Composite Index proceeded to fall 1.23 percent to 3,166.62.
Turning to wider markets, Germany’s DAX and France’s CAC-40 were down 2.8 percent and 2.6 respectively, while the euro was 0.4 percent stronger at $1.1255 against the dollar.
Eurozone manufacturing and services PMIs came out lower than expected while the US number is still to come later. The EU unemployment rate stood at 10.9 percent.
US construction spending, IBD/TIPP economic optimism and total vehicle sales are also scheduled for release.
As for other precious metals, Comex silver for December settlement was last up 4.9 cents to $14.635. Trade has ranged from $14.505 to $14.685.
Platinum for October delivery on the Nymex fell $5.30 to $1,005.20 per ounce, while the most-actively traded palladium contract was at $590.25, down $12.0.
(Editing by Tom Jennemann)
The post Gold trends upward, investor focus on US jobs report appeared first on The Bullion Desk.
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