Gold futures traded lower on Wednesday, with a weaker-than-expected U.S. private-sector jobs data only providing a temporary boost to prices for the haven metal, as investors expected the jobs report due on Friday to provide more definitive direction guidance for gold.
Investors are attuned to the labor market data because it could help determine the pace and timing of the Federal Reserve’s tapering of purchases of $80 billion in Treasurys and $40 billion in mortgage-backed securities, which have helped to support financial markets in the U.S. during the worst of the COVID pandemic.
However, the recovery from the pandemic, amid the spread of the coronavirus delta variant, has raised questions about the need for ongoing easy money policy.
The dollar eased a little following the release of the ADP data, which “gave gold prices a small boost, but we’re talking very small numbers,” said Craig Erlam, senior market analyst at Oanda, in a market update.
Businesses in the U.S. created a lackluster 374,000 new jobs in August, a new ADP survey found. Economists surveyed by The Wall Street Journal had forecast a 600,000 gain.
With the private-sectors jobs data out of the day, that “leaves gold to ease its way into the jobs report at the end of the week, when I’d expect to see a much greater response to the data,” said Erlam.
“With gold hovering so close to the July highs around $1,833, the jobs data will be huge for the yellow metal, with a break above here putting it firmly back into bullish territory,” he said.
Against that backdrop, December gold was trading $2.90, or 0.2%, lower at $1,815.20 an ounce, following a 0.3% gain on Tuesday. The precious metal put in a monthly advance of less than $1.
Prices for the metal continued to trade lower after the IHS Markit reading of manufacturing activity for August showed a climb to 59.9% from 59.5% in the prior month. Economists polled by MarketWatch had forecast a reading of 58.6%.
In other metals, silver for December delivery rose 21.9 cents, or 0.9%, to nearly $24.24 an ounce to start September, following a monthly fall of 6%.
December copper shed 2.2% to $4.28 a pound. October platinum lost 1.6% to $998.10 an ounce and December palladium traded at $2,437.50 an ounce, down 1.4%.