London: Gold held last month’s decline as investors await US jobs data due Friday for further clues on the timing of an interest-rate increase.
Bullion for immediate delivery was 0.2 per cent lower at $1,306.39 an ounce at 11:24am in London, according to Bloomberg generic pricing. The metal dropped to $1,304.29 on Wednesday, the lowest level since June 24, and lost 3.1 per cent in August.
Gold’s 23 gain in 2016 has been dented after Federal Reserve officials indicated a greater likelihood of tightening before the end of the year. Traders will scrutinise Friday’s payrolls report in light of Fed vice-chairman Stanley Fischer’s comment on Tuesday that the bank will base decisions at its Sept. 20-21 meeting on data. Figures from ADP Research Institute on Wednesday showed that companies added workers in August in line with projections.
“Gold is eyeing US employment figures due out on Friday for clues on the strength of the economy,” George Coles, a research analyst at Metals Focus in London, said by phone. “The market is waiting for clues on future Fed policy, which is the main driver of gold prices at the moment.”
Gross’s View
Bill Gross, the billionaire manager of the Janus Global Unconstrained Bond Fund, is recommending that the Fed raise interest rates twice by as early as March, with the first hike at this month’s meeting. Futures show a 36 per cent chance of action then, up from 18 per cent at the start of August.
The speculation about the Fed’s next step has helped the dollar to recover, blunting gold’s appeal. The Bloomberg Dollar Spot Index rose in August to post the first monthly increase since May.
Holdings in bullion-backed exchange traded funds lost 11.3 metric tonnes to 2,021.3 tonnes on Wednesday, data compiled by Bloomberg show. This was the biggest decline since August 12.
