Gold Declines Before U.S. Jobs Report as Investors Weigh Demand 

gold-2

Gold fell before U.S. payrolls data that may show employers added more workers last month, boosting the case for an increase in borrowing costs in the largest economy as the dollar headed for a seventh weekly increase.

Bullion for immediate delivery lost as much as 0.3 percent to $1,201.81 an ounce and traded at $1,204.60 at 2:16 p.m. in Singapore, according to Bloomberg generic pricing. Prices fell 0.3 percent yesterday after the European Central Bank said that it wouldn’t add to bullion reserves.

Improvements in the U.S. economy are spurring speculation that the Federal Reserve (Fed) will start raising interest rates next year, cutting demand for the metal as other central banks weigh increases in stimulus. A Fed survey on Dec. 3 showed widespread gains in employment in industries from aerospace to finance. The metal remains 3.2 percent higher this week, the most since March, after surging on Dec. 1 as energy prices rebounded.

“Physical buyers and some of the more prudent investors are thinking this might look like good value,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “I still want the market to focus on job growth.”

U.S. employers probably added 230,000 workers in November after hiring 214,000 the previous month, according to the median estimate of economists surveyed by Bloomberg News before today’s Labor Department report. The Fed ended a bond-purchase program at its October meeting, citing labor-market improvements.

SPDR Holdings

Gold for February delivery declined 0.3 percent to $1,204.70 on Comex in New York, trimming a weekly increase. Holdings in the SPDR Gold Trust were unchanged yesterday for a second day at 720.02 metric tons.

The Bloomberg Dollar Index, which tracks the currency against 10 counterparts, closed at the highest level since 2009 on Dec. 3. The Fed’s survey on Dec. 3 confirmed the outlook for an interest-rate increase in the middle of next year, according to Jerry Webman, who helps oversee $245 billion as chief economist at OppenheimerFunds Inc. in New York.

Silver for immediate delivery retreated 0.2 percent to $16.4394 an ounce, trimming a 6.4 percent gain this week, the biggest since February. Spot platinum was little changed at $1,236.22 an ounce, set for a weekly advance. Palladium added 0.2 percent to $800 an ounce, set for a weekly loss.

Source: Bloomberg – Gold Declines Before U.S. Jobs Report as Investors Weigh Demand

Leave a Comment


Broker Cyprus TopFX