BU: GOLD PRICE DIPS ON FRESH SIGNS OF HEALTHY US LABOUR MARKET
Gold futures turned moderately lower in the US on Thursday morning when improved US data interrupted the metal’s steady rally.
Gold for December settlement on the Comex division of the New York Mercantile Exchange was last down $2.40 or 0.2 percent at $1,177.40 per ounce. Still, the contract continues to trade above its 200-day moving-average of $1,176.50, with the psychological $1,200 level now in play.
“Gold’s ability to push upward through that resistance was most impressive and our positions are proving finally to be of very real merit,” Dennis Gartman, editor and publisher of The Gartman Letter, said.
The yellow metal picked up steam yesterday after a disappointing US retail report. But today’s figures reinforced claims that the US labour market is recovering steadily – weekly unemployment claims came in at 255,000, below the consensus of 269,000.
As well, the CPI in September met expectations of a 0.2-percent decline while core CPI at 0.2 percent beat the forecast of 0.1 percent. But the Empire State manufacturing index for October at -11.4 was worse than the expected -7.3.
“In line with our expectations, gold prices have continued to strengthen,” FastMarkets analyst Boris Mikanikrezai said. “But upside potential now seems to be limited so we prefer to remain cautious at $1,200 per ounce.”
After falling to a four-week low against the euro, the dollar has recovered today – it was last trading 0.8 percent stronger at 1.1382 against the single currency.
The dollar had steadily lost ground since the release of the lacklustre US employment report on the first Friday of October. Softening jobs data and a lack of inflation is leading to dissenting views in the Federal Reserve about when to raise interest rates form near-zero levels.
Leading market participants to believe higher rates are off the table for 2015, according to the CME Group FedWatch.
New York Fed president William Dudley will speak later today.
Turning to wider markets, Germany’s DAX and France’s CAC-40 were up 1.4 percent and 1.2 percent respectively.
In the other precious metals, Comex silver for December delivery fell 2.7 cents or 0.2 percent to $16.090 per ounce. Trade has ranged from $15.900 to $16.195.
Platinum for January settlement rose 40 cents to $995.80 per ounce while the most actively traded palladium contract was last at $705.85, up $5.00.
