ISM reports that gold now holds steady near the 3-month high of the U.S. API
In Europe on Wednesday, gold futures held steady near the previous session’s high period of three months. This was despite investors expecting key data from the US later in the afternoon for them to gauge whether the world’s largest economy will have adequate strength to withstand additional rate hikes as the year progresses.
The report for January ADP jobs was to be released at 13:15 GMT or 8:15 AM ET, before the release of the service sector growth report for the same month at 15:00 GMT or 10:00 AM ET by the US Institute of Supply Management.
Many market players are currently focusing on the nonfarm payrolls report by the United States on Friday. The consensus forecast indicates that data will show growth of jobs of 190,000 for the previous month before reflecting an increase of 292,000 in December whereas the forecast for unemployment will hold steady at 5.0%.
Gold for the April delivery of the New York Mercantile Exchange’s Comex division ticked down by 50 cents or 0.04% and traded at $1,126.70 per troy ounce by 07:50 GMT or 2:50 AM ET.
Gold rallied at $1,131.50 a day earlier—which was the highest since November 3. This came amid growing skepticism about the ability of the Federal Reserve to raise interest rates as it would like to do this year.
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Different market participants anticipate one more hike in rates this year as compared with the four that the Fed policy makers suggested. A gradual path that leads to higher rates will be seen as a minor threat to the price of gold compared to a swift series of rate increments.
The price of gold has increased by 6% this year as the retreating prices of oil and losses in global equity markets underpin the demand for safer assets. Gold is considered an alternative currency during times of refuge from financial risk and global economy uncertainty.
Silver futures for the March delivery period dipped by 2.4 cents or 0.17% on Comex to trade at $14.26 per troy ounce over the morning hours in the London Stock Exchange.
Copper edged higher but the gains were limited despite the ongoing worries over the health of the global economy, especially China.
The prices of copper declined by 3% in 2016 as investors slashed the metal’s holdings despite persistent concerns about China’s slowdown. China accounts for 45% consumption of copper—the largest consumer in the world.