Metals Stocks: Gold extends slump after strong private-sector jobs data

Gold futures extended a slump, putting the yellow metal on track to close at its lowest level since early February, after data showed a jump in private-sector job creation in February, further cementing expectations for the Federal Reserve to raise interest rates next week.

Gold for April delivery on Comex GCJ7, -0.64%  fell $6.70, or 0.6%, to $1,209.40 an ounce, while May silver SIK7, -1.06%  declined 19.6 cents, or 1.1%, to $17.34 an ounce.

Payrolls-processor ADP said the U.S. added 298,000 private-sector jobs in February, the most since April 2014. Analysts view the employment data as a guide to the Labor Department’s monthly jobs report, set for release Friday.

“This morning’s blowout ADP number of 298,000 signals a strong jobs market and almost guarantees a March bump in rates,” said Peter Hug, global trading director at Kitco, in written comments.

Expectations for a faster tightening cycle from the Fed have lent strength to the dollar, which has helped undermine gold. A stronger dollar can weigh on gold by making the metal, which is priced in the U.S. currency, more expensive to nondollar users.

Fawad Razaqzada, analyst at Forex.com, said gold could find support in the event of a stock market correction, noting that the S&P 500 SPX, +0.12%  is trading near important support near 2,366-2367.

“If this level were to break down decisively, it may trigger profit-taking and short selling response from market participants,” Razaqzada said. “This could in turn boost the appetite for perceived safe haven assets such as gold, silver and yen USDJPY, +0.46% The resulting weakness in the [dollar-yen trade] may weigh on the dollar Index DXY, +0.18% which in turn could support dollar-denominated precious metals even further.”

Razaqzada cautioned, however, that gold is yet to show any signs of support “and for now at least the path of least resistance remains to the downside. Thus, it appears likely that the metal may drop to test the $1,200 level again in the coming days, provided that intermediate support at $1217/20 area gives way. This level was being tested at the time of this writing,” he said.

In other metals trade, April platinum PLJ7, -0.61%  fell $5.70, or 0.6%, to $955.40 an ounce, while June palladium PAM7, -0.37%  lost $5.85, or 0.8%, to $769.15 an ounce. May copper futures HGK7, +0.04%   rose 0.65 cent, or 0.2%, to $2.625 a pound.

Filed in: Top News Tags: 

You might like:

5 things to know about the IPO of Nio, AKA the ‘Chinese Tesla’ 5 things to know about the IPO of Nio, AKA the ‘Chinese Tesla’
The Tell: The ‘longest bull market’ in history? Not so fast The Tell: The ‘longest bull market’ in history? Not so fast
Key Words: No, really, Sarah Sanders just corrected an ‘alternative fact’ Key Words: No, really, Sarah Sanders just corrected an ‘alternative fact’
Currencies: Turkish lira rebounds for a second session in a row Currencies: Turkish lira rebounds for a second session in a row
New ETF allows you to invest in up-and-coming Chinese biotech companies New ETF allows you to invest in up-and-coming Chinese biotech companies
The Wall Street Journal: Turkey raises tariffs on U.S. products as dispute escalates The Wall Street Journal: Turkey raises tariffs on U.S. products as dispute escalates
London Markets: U.K. stocks notch longest losing streak since February London Markets: U.K. stocks notch longest losing streak since February
‘Crazy Rich Asians’ actors hope film’s success will open more doors for Asian-Americans ‘Crazy Rich Asians’ actors hope film’s success will open more doors for Asian-Americans

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.