SAN FRANCISCO (MarketWatch) — Gold futures on Wednesday settled closer to $1,300 an ounce, ending a losing streak that’s spanned five sessions, with prices pushing higher as economic data mount ahead of the jobs report at the end of the week.
Gold for June delivery /quotes/zigman/698029/realtime GCM4 -0.19% rose $10.80, or 0.8%, to settle at $1,290.80 an ounce on the Comex division of the New York Mercantile Exchange. May silver /quotes/zigman/10480467/realtime SIK4 -0.95% added 36 cents, or 1.8%, to $20.05 an ounce, closing above $20 for the first time since March 24.
Gold held gains as Automatic Data Processing Inc. estimated that private-sector employers added 191,000 jobs last month, up from a revised-higher figure of 178,000 in February.
Gold typically sees “frantic trading” around the official monthly U.S. jobs data release due Friday, said Adrian Ash, head of research at BullionVault.
But “there’s zero correlation between either ADP or official [nonfarm payrolls] with monthly gold prices over the last 3 years,” he said. “Big moves in non-farms week usually wind up with gold back wherever it was.”
Separately Wednesday, the U.S. Commerce Department said factory orders in February rose 1.6%, higher than the forecast for a rise of 1.3% from economists surveyed by MarketWatch.
Pushing reform in China but only hope in India
Chinese officials are slowly pushing reforms for the financial sector. Meanwhile in India, enthusiasm for reform is mostly just that, Cornell University’s Eswar Prasad tells WSJ’s Abheek Bhattacharya.
The markets have not yet fully digested Fed Chairwoman Janet Yellen’s comments Monday that the Fed will continue to stimulate the economy until the unemployment levels have dropped strongly until more workers are permanently employed, not just in part time jobs, said Julian Phillips, founder of and contributor to GoldForecaster.com.
For the U.S. jobs report covering March, economists surveyed by MarketWatch are looking for nonfarm payrolls to climb to 200,000 from 175,000 and expect the unemployment rate to slip to 6.6% from 6.7%.
Jeffrey Wright, managing director at H.C. Wainwright, expects the nonfarm payrolls number to come in well above 200,000 jobs, “which might be a negative for gold on Friday with the risk-on strategy getting more attention.”
A “miss on Friday’s employment numbers would be a net positive for gold,” he said, with the Federal Open Market Committee “still divided” based on comments from St. Louis Fed President James Bullard, who is looking for the first rate increase in the first quarter of 2015.
Atlanta Fed President Dennis lockhart said Wednesday that the first rate hike isn’t likely to be warranted until at least the last half of next year.
Wright said he does “not believe Chairwoman Yellen will be receptive [to a rate hike] until at least mid-2015 unless inflation takes root.”
Meanwhile, the market waits to see if the European Central Bank is “going to drop interest rates and or introduce vigorous asset purchases” at its meeting Thursday in a move to stave off deflation, Phillips said.
Gold futures closed lower Tuesday for a fifth-straight session, sticking to a tight range as traders looked forward to U.S. economic data for clues on the metal’s demand outlook.
Gold was due for a bounce, said Mark O’Byrne, a Dublin-based director at GoldCore. “Geopolitical risks remain high and tension between Russia and the West are far from resolved. This should support gold in the short term, [though] momentum may push gold lower to test the $1,200-an-ounce level.”
Elsewhere in metals trading, July platinum /quotes/zigman/15256884/realtime PLN4 +0.19% rose $9.10, or 0.6%, to $1,438.70 an ounce, while June palladium /quotes/zigman/14634051/realtime PAM4 +0.03% gained $5.85, or 0.8%, to $787.80 an ounce.
High-grade copper for May delivery /quotes/zigman/678457/realtime HGK4 -0.54% added 1 cent, or 0.4%, to nearly $3.05 a pound.
The gold-backed SPDR Gold Trust /quotes/zigman/41663/delayed/quotes/nls/gld GLD -0.21% climbed 0.8% Wednesday afternoon, as the Philadelphia Gold and Silver Index /quotes/zigman/1475600/realtime XAU -0.67% tacked on 2.3%. The exchange-traded fund and index each traded strongly higher year to date. /quotes/zigman/41663/delayed/quotes/nls/gld GLD -0.21%