The Bull

Wednesday 14

November, 2018 9:32 AM



Gold dips as $US gains on solid jobs data

Gold dips as $US gains on solid jobs data

Gold prices slipped as the US dollar regained some ground on the back of strong American jobs data.

Share |

By AAP 05.11.2018 07:54 AM

Gold has slipped as the US dollar regained some ground on the back of strong American jobs data, putting the metal on track for its first weekly loss in five weeks.

Spot gold was down 0.2 per cent at $US1,231.22 per ounce.

The bullion was down 0.1 per cent for the week.

US gold futures settled down $US5.30, or 0.43 per cent, at $US1,233.30.

The dollar index gained after data showed US job growth rebounded sharply in October and wages recorded their largest annual gain in nine and a half years.

"Strong data helped the dollar, which put some pressure on gold," said Tai Wong, head of metals trading at BMO.

"The fact that the data is strong despite storm-related disruptions, suggests the economy is humming along strongly and that the Fed will continue to hike interest rates."

The US Federal Reserve has raised interest rates three times this year and is widely expected to raise rates again in December.

Gold is sensitive to higher US interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

"Given the fact that we had a very strong rally yesterday, we are going to struggle towards the $US1,240-$US1,245 highs off this move unless we get a sustained downward movement on the dollar," Wong said.

Gold jumped about 1.5 per cent in the previous session as the dollar retreated sharply from a 16-month high.

Share on major world markets rallied on hopes that the United States and China were starting to repair their damaged trade relations.

"The return of risk appetite could be a bearish sign for gold, given how it's benefited from its safe-haven status as of late," Craig Erlam, senior market analyst at OANDA in London, said in a note.

Attention is now turning to the US congressional elections on November 6, which will determine whether the Republican or Democratic party controls Congress, with some predicting increased market volatility on the outcome.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to their highest since late August on Thursday.

Meanwhile, physical gold demand in India, the second biggest consumer, remained lacklustre this week, with dealers offering discounts for the metal ahead of a traditionally busy festival week for the first time in at least three years, as high prices kept consumers away.

Among other precious metals, platinum climbed 1.3 per cent to $US868 per ounce, having touched its highest since June 25 at $US870.80 earlier in the session.

Palladium rose 1.8 per cent to $US1,110 per ounce and silver was down 0.2 per cent at $US14.70 per ounce.

Archive
Markets
Index: Points Change Percent

PLEASE SUPPORT OUR SPONSORS, AUSTRALIA'S LEADING BROKERS:



© Copyright TheBull.com.au. All rights reserved.