MW: Gold hovers around 2-month lows ahead of jobs report
Gold futures traded at two-month lows Thursday after notching their first monthly loss since May in August, as data and commentary leading up to Friday’s jobs report offered fodder for the camp expecting higher interest rates this year.
Gold is at “its lowest level since the Brexit referendum. As such, [spot] gold was down by a good 3% overall in August,” said Carsten Fritsch and commodities team at Commerzbank, in a note.
“If the official U.S. labor market data that are due to be published tomorrow turn out to be as good as the ADP’s [private-sector hiring] figures that were published yesterday, the gold price is likely to come under further pressure,” Commerzbank wrote. “This is because this would presumably add further fuel to expectations of a U.S. Federal Reserve rate hike before September is out.”
December gold GCZ6, -0.27% fell $1.90, or 0.2%, to $1,309.40. It settled Wednesday at $1,311.40 an ounce, the lowest settlement for a most-active contract since June 23, according to FactSet data. For the month of August, it traded down 3.4%, according to FactSet data.
Gold fell even as the dollar wavered against its chief rival. That left the ICE U.S. Dollar Index DXY, +0.10% a measure of the greenback against a basket of six rival currencies, was down less than 0.1% at 95.98.
The prospect for higher interest rates usually lifts the dollar, depressing the value of precious metals priced in the currency. And a rate increase tends to cut demand for assets that don’t provide a yield, including gold.
In other trading, December silver SIZ6, -0.06% rose 2 cents, or 0.1%, to $18.73. For the month of August, however, silver prices declined 8.1%, based on the most-active contract.
