In Commodity News 04/08/2016
Gold declined for a second day before the release of official U.S. jobs data that may confirm steady employment as signaled by Wednesday’s private ADP Research Institute report, and throw some light on the possible timing of an interest-rate increase.
Bullion for immediate delivery fell as much as 0.6 percent to $1,350 an ounce and traded at $1,352.30 at 2:37 p.m. in Singapore, according to Bloomberg generic pricing. The metal gained to $1,367.34 on Aug. 2, the highest intraday level since July 11.
Gold has rallied 27 percent this year as the Federal Reserve held back on further tightening in the U.S., and other central banks and governments push stimulus to boost growth. The Bank of England is set to cut rates to a record later Thursday, according to almost all economists in a Bloomberg survey. In the U.S., the ADP report showed that companies added179,000 jobs last month, beating estimates and boosting the dollar.
“Markets are currently expecting the non-farm payroll to show a 180,000 increase,” said Vyanne Lai, an economist at National Australia Bank Ltd., referring to data due Friday. “But if the actual result is stronger, say, 200,000 or more, market probability for a rate hike by the Fed in September is likely to increase, and in turn will weigh on gold.”
On Wednesday, Fed Bank of Chicago President Charles Evans said a rate increase could be warranted this year as the economy picks up steam, even though he’s still worried that inflation is too low. Investors see only 20 percent odds of a hike in September, according to prices of federal funds futures.
- Holdings in gold-backed exchange-traded funds added 1.97 metric tons to 2,025.7 tons on Wednesday, data compiled by Bloomberg show. That’s the highest level since July 2013.
- In China, bullion of 99.99 percent purity was 1.1 percent lower at 288.76 yuan a gram ($1,353.32 an ounce) on the Shanghai Gold Exchange.
- On the Shanghai Futures Exchange, gold for December delivery declined 0.9 percent to 290.05 yuan a gram, while silver tumbled 2.4 percent to 4,459 yuan a kilogram.
- Silver in London fell 1 percent to $20.2020 an ounce.
- Platinum lost 0.8 percent and palladium dropped 0.6 percent.
Source: Bloomberg
