Gold prices ended the U.S. day session moderately lower Wednesday, on profit taking and a corrective pullback from recent gains that pushed prices to a three-week high Tuesday. December Comex gold was last down $7.70 an ounce at $1,364.80. September Comex silver was last down $0.201 at $20.50 an ounce.
Data released today by payrolls processor and survey-maker ADP showed that the U.S. private sector added 179,000 jobs in July, more than experts predicted. That gave the U.S. dollar gave the dollar a middling-to-strong boost.
The dollar is up about 0.60% against the euro and 1.55% against the yen, which has been a bit top-heavy. Japanese financial officials also tried to talk down their currency today, which accounts for the significantly great gain of the dollar against the yen.
The stronger dollar in turn handed gold almost all of its losses on the day. Gold was down about $5.00 in late afternoon trading. Silver, which seems to be getting sucked into more volatility, is down nearly 1.00% on the day.
The dollar’s gains allowed the greenback to recover from six-week lows hit on the Tuesday session. Some investors are sitting out, waiting for the full employment picture that will be presented by the U.S Department of Labor Friday morning. The data released then might have an effect upon the next round of interest rate hikes, possibly in middle-late September.
Continuing sluggishness in the global economy is encouraging demand for precious metals, says MKS (Switzerland) S.A. Spot gold is back within roughly $12 of its two-year high hit early last month. “Weak global growth seems to be fueling the demand for gold at present, (as) investors’ optimism of a rise in U.S. rates begins to wane,” says Alex Thorndike, senior-precious metals dealer. “'Lower for even longer' seems to be the consensus view amongst investors, and this sentiment could easily drive gold higher in the short to medium term.
Reference: ฺKitco
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