Gold prices on Wednesday were trading on either side of unchanged in the final day of the month and quarter as investors parsed private-sector employment data ahead of a key jobs report due later this week.
Commodity investors also were awaiting details on highly anticipated infrastructure plan from President Joe Biden, which could deliver another jolt to the pandemic-stricken U.S. economy.
Earlier in the session, a private-sector report from ADP, ahead of the closely followed Labor Department data due on Friday, showed that the U.S. added 517,000 jobs in March, marking the biggest gain in six months as a decline in coronavirus cases allowed more businesses to reopen or expand hours.
The ADP report suggests the government’s report to be released in a few days will be a strong one.
The private-sector report delivers further evidence of a strengthening U.S. economy that is being powered by a massive $1.9 trillion federal aid package and rollout of COVID vaccines.
Against the backdrop, gold has been under pressure lately, with the April contract adding 90 cents, or less than 0.1%, to trade around $1,686.90 an ounce on Wednesday, following a nearly 1.7% slump for the precious metal on Comex. Prices based on the most-active contract are trading around the lowest since March 8, according to FactSet data.
“The main trend remains bearish and a clear break down of the support at $1,675 could open space for further declines while only a recovery to $1,750 would reverse the main negative trend,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a note.
“We should also note that earlier this month as soon as the price fell below $1,700, buyers showed strong interest for bullion but so far this hasn’t happened on this latest dip,” he said.
Meanwhile, May silver was giving up 5 cents, or 0.2%, to trade at $24.09 an ounce, after declining 2.6% on Tuesday.
Looking ahead, Biden is slated to unveil the first part of his “Build Back Better” plan in Pittsburgh later Wednesday, which would detail a $2 trillion or more in spending on infrastructure.
Gold has retreated by 2.6% and by lost nearly 11% in the first three months of 2021, FactSet data show. Silver has declined nearly 9% in March and has shed about that much in the first quarter.
Precious metals have slumped as the dollar has strengthened over the same period, with the ICE U.S. Dollar Index up 2.6% in March and 3.7% in the first quarter. A stronger dollar can make dollar-price assets comparatively more expensive to overseas buyers.
Rising yields also have been a key headwind for metals, which have benefited from haven flows during the pandemic, with the 10-year Treasury note hitting a 14-month high above 1.76% in recent trade. Precious metals don’t offer a coupon.