LONDON. — Gold rose yesterday, recouping some strength after two days of losses but remained near its lowest in seven weeks on expectation of strong jobs data in the world’s largest economy. Spot gold edged up 0,3 percent to $1 283,20 an ounce, still within reach of its lowest since February 11 at $1 277,29 hit in the previous session.
Gold futures for April delivery rose $4 to $1 284 an ounce.
“It’s a big data week, in addition to the various economic numbers already seen, we’ve got the NFPs (US nonfarm payrolls) coming up and there is some repositioning ahead of that,” Mitsubishi analyst Jonathan Butler said.
“We have ADPs (employment data) later today, and there will be a greater search for meaningful clues from the Fed as to whether a genuinely hawkish stance is being taken as suggested a couple of weeks ago or not.”
Gold fell in the previous session after data showed US factory activity accelerated for a second straight month in March and car sales surged, the latest signs the economy was strengthening after a brutal winter.
As US data turn more positive after two months of underperformance due to extremely cold weather, market participants awaited nonfarm payrolls on tomorrow, which will be preceded by ADP job numbers later yesterday and weekly jobless claims today.
The negative effect of any strong US data on gold could, however, be cushioned by Federal Reserve chairwoman Janet Yellen’s recent defence of the Fed’s easy monetary policy, analysts said.
In wider markets, the dollar was unchanged against a basket of currencies, drawing support from steadier US Treasury yields.
Returns from US bonds are closely watched by the gold market, given that the metal pays no interest.
As a gauge of investor interest, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), fell 2,10 tonnes to 810,98 tonnes on Tuesday — the lowest since early March.
Chinese demand
Physical demand from top consumer China rose slightly, with local prices trading at a premium to spot London prices for the first time since early March.
Prices for 99,99 percent purity gold on the Shanghai Gold Exchange hit a premium of about $1 an ounce to spot prices before easing to trade on par with London rates.
Since early March, Shanghai prices have been at a discount due to weak demand. Traders said discounts had gone up to $8-$10 an ounce.
Prices were at a premium of more than $20 an ounce in January just before the Chinese New Year holiday.
“Physical demand remains lacklustre across a host of regions and this is an important signal — gold needs that physical indicator to pick-up in order to give the market some confidence that a floor is nearby,” UBS said in a note.
Among other precious metals, platinum rose 0,8 percent to $1 426,49 an ounce and palladium gained 0,93 percent to $777 an ounce on continued worry over supply constraints and positive US car sales.
Anglo American Platinum said it had sent force majeure notices to some of the suppliers to its South African mines, saying underscoring the widening economic effect of an almost 10-week-old strike.
Silver rose 0,8 percent to $19,85 an ounce. – Reuters.