Gold edges up as greenback retreats

NEW YORK/LONDON: Gold edged higher on Thursday, supported by the retreating US dollar and a tumble in global equities as traders awaited US employment data seen as key to determining when the Federal Reserve may raise interest hikes.

US non-farm payrolls data are due on Friday and economists polled by Reuters predict employment in July increased at the same pace as June's 223,000 rise.

Spot gold was up 0.5% at $1,090.11 an ounce by 1759 GMT (1:59 p.m. EST). The metal breached important technical support at US$1,100 after a deep rout in late July pushed it as low as US$1,077, its weakest since February 2010.

US gold for December delivery rose 0.4 percent to settle at US$1,090.10 an ounce.

The dollar was down against a basket of major currencies. Weak earnings dragged stocks lower.
"We're seeing a mild consolidation rally," said Bill O'Neill, co-founder of commodities investment firm LOGIC Advisors in New Jersey.

"The dollar has lost a little ground and we have nervousness surrounding equities." Investors have abandoned bullion during a broad commodities sell-off and on expectations that the Fed may raise interest rates as early as next month.

The looming rise in US rates dims the appeal of non-interest yielding gold, instead pulling more funds towards the dollar.

Data on Thursday showed the number of Americans filing new applications for unemployment benefits rose less than expected last week.

Expectations that the Fed could increase rates at its next policy meeting in September gained ground this week after Atlanta Federal Reserve President Dennis Lockhart said only a "significant deterioration" in the US economy would make him not support a rate rise next month.

But Fed Governor Jerome Powell said policymakers had not yet decided whether to raise rates next month, adding that more recent employment data had been mixed.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell to 21.47 million ounces on Wednesday, the lowest since September 2008.

"In the medium term, with rising bond yields, EM (emerging markets) currencies collapsing, no safe haven demand and with the dollar potentially going higher on U.S. rate expectations, there is no gold-friendly news out there," Saxo Bank senior manager Ole Hansen said.

In other metals, spot palladium gained 1.1% to US$597.25 an ounce, as platinum rose 0.4% to US$951 per ounce, not far from a 6-1/2 year low hit earlier in the week. Silver was up 1% at US$14.67 an ounce.- Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Next In Business News

Central Global's unit bags RM183.29mil sub-contract from Pembinaan Urusmesra
ECA Integrated Solutions signs underwriting agreement with UOB Kay Hian for IPO
Ringgit ends lower against US$ on expectation aggressive US monetary policy will continue
China's yuan ends at weakest since global financial crisis, hits record low offshore
RHB Bank issues RM500mil subordinated notes under MCMTN programme
S P Setia kickstarts green partnership wtih TNB
Bursa Malaysia ends broadly lower amid global recession concerns
Sime Darby Motors to distribute BYD EVs in Malaysia
Uchi Tech disposes of Penang Island tract for RM19mil
K-One Tech unit gets nod from Health Ministry for silicone adhesive tapes

Others Also Read