WSJ:Gold a Tad Higher as Investors Look To US Employment Report
By Laura Clarke
LONDON--Gold futures edged up a touch Thursday with the market focusing on U.S. employment data, after Federal Reserve policy meeting minutes pressured prices in the previous session and Bank of America Merrill Lynch trimmed its bullion price forecasts.
Spot gold was 0.1% higher on the day at $1,227.10 per troy ounce. Silver rose 0.2% to $19.540 per ounce, while platinum fell 0.2% to $1,409.25 per ounce and palladium rose 0.2% to $735.30 per ounce.
On Wednesday gold extended losses posted earlier in the session after the latest Federal Open Market Committee minutes confirmed most policy makers were in favor of rolling back economic stimulus that had supported demand for bullion as a an inflation hedge. Overall, there were few surprises in the minutes and prices swiftly recovered.
Analysts expected this trading pattern to continue, at least in the short-term, with the market focus staying on U.S. economic data.
Gold's losses Wednesday were in part fueled by better-than-expected U.S. labor market from Automatic Data Processing Inc. and Moody's Analytics. Initial jobless claims are released Thursday, followed by unemployment data and nonfarm payroll figures within the monthly U.S. employment report Friday.
Technical analyst Clive Lambert at FuturesTechs said there is bold support for gold at $1,222.40, and tipped prices to rise from current levels toward $1,250 based on longer term-price charts.
Analysts at Bank of America Merrill Lynch said Thursday that the yellow metal might find near-term support as indexes complete their rebalancing.
But the bank's outlook for the metal over the coming months was more severe -- it cut its average 2014 gold and silver price forecasts by 11% and 21%, to $1,150 an ounce and $18.38 an ounce, respectively.
"Our continued bearish view is driven by the challenging macro-economic environment, which is best captured by rising U.S. 10-year rates and a persistent lack of inflation pressures," it said.
Even so BoAML said there was a substantial chance gold prices could bottom out later in 2014 as the market comes back into balance, providing interesting entry opportunities for potential investors.
