June 1, 2017 / 10:30 AM / in a year

PRECIOUS-Gold dips as U.S. jobs data bolsters dollar

    * US private sector adds more jobs than expected in May
    * Palladium hits highest in a month, platinum struggles

 (Adds quote)
    By Eric Onstad
    LONDON, June 1 (Reuters) - Gold dipped on Thursday after the
first of two key U.S. jobs reports this week beat forecasts,
raising expectations for an interest rate rise and lifting the
    U.S. private employers added 253,000 jobs in May, above
economists' expectations, a report by a payrolls processor
showed on Thursday.             
    The ADP figures come ahead of the U.S. Labor Department's
more comprehensive non-farm payrolls report on Friday, which
includes both public and private sector employment. 
    "We are getting important data today and tomorrow, and gold
is very much dependent on how the dollar and yields will react
to that data, so it's a bit of a waiting game," said Georgette
Boele, commodities strategist at ABN AMRO in Amsterdam.
    Spot gold        was down 0.2 percent at $1,265.30 an ounce
by 1410 GMT, having peaked the previous day at its strongest
since April 25 at $1,273.74.
    U.S. gold futures         fell 0.7 percent to $1,263.30.    
    Also weighing on gold was the slightly firmer dollar index
      , which extended gains after the ADP data, already
supported by higher U.S. Treasury yields and solidifying
expectations of a rise in U.S. interest rates this month.       
    Positive payroll data from the United States could mean the
Fed will raise rates as expected at its June 13-14 meeting.
Traders believe there is an 87 percent chance of a rate rise,
according to CME Group's FedWatch tool.               
    Gold, which has gained about 10 percent this year, has good
support slightly below current levels, Boele said. 
    "Gold looks very well protected around the $1,250 area at
the moment. You have the 200-day moving average supporting the 
price," she added. 
    Demand for American Eagle gold coins remains lacklustre,
data from the U.S. Mint showed, with sales for the first five
months of the year tumbling 56 percent from the same period last
year to 186,500 ounces.              
    Among other precious metals, silver        fell 0.7 percent
to $17.17 an ounce and platinum        shed 1.1 percent to
$932.80, after touching a low of $923, the weakest since May 15.
    "Platinum is struggling because of weaker outlook
expectations for car sales as well as jewellery sales in China,"
Boele said.
    U.S. new vehicle sales in May were likely propped up by
heavy discounts, say industry analysts who expect that demand in
the month was little changed or up just slightly after two
months of falling sales.             
    Platinum is mainly used in auto catalysts that reduce
harmful emissions from the exhaust.
    Palladium        climbed 0.9 percent to $824.50 after
touching an intraday peak of $827.60, the highest since May 1.  

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by David Goodman and Susan Fenton)
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