Gold prices have ended lower, as the US dollar strengthens and some investors grow cautious ahead of key US employment data.
Gold for June delivery, the most active contract, on Thursday fell $US6.20, or 0.5 per cent, to settle at $US1,284.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold prices have been moving lower in recent weeks as some investors became more optimistic about the US economic outlook, while others grew wary of holding zero-yielding assets after the Federal Reserve signalled that it could raise benchmark interest rates as early as the first half of 2015.
A stronger US dollar, which advanced against the euro, put further pressure on prices. The ICE Dollar Index was recently up 0.3 per cent at 80.484. Gold is traded in US dollars and becomes more expensive for foreign buyers when the greenback strengthens.
“The stronger dollar pushed gold back,” said Bill Baruch, senior market strategist with Chicago futures brokerage iiTrader.
Some gold traders are also reducing their holdings ahead of Friday’s non-farm payrolls data. The monthly labour-market gauge is considered an indicator of the likely path of US monetary policy, with stronger readings auguring tighter policy, while weaker reports are seen as a sign that the Fed is likely to prolong its accommodative measures.
Baruch said that March was one of the first months most economists expected the economy to add 200,000 jobs, a level that for some has become a line in the sand separating a healthy economy from one that still needs the Fed’s accommodative policies.
“We need to see 200,000-plus jobs created a month to support the idea that the economy is growing properly,” he said.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $US1,284.00; previous PM $US1,292.00
Jun gold $US1,284.60, down $US6.20; Range $US1,281.90-$US1,294.20
May silver $US19.805, down 24.5 cents; Range $US19.660-$US20.080
Jul platinum $US1,445.50, up $US6.80; Range $US1,433.30-$US1,446.70
Jun palladium $US788.85, up $US1.05; Range $US782.80-$US792.50