US MIDDAY: Gold slides to 11-week low

30 Jun, 2021

NEW YORK: Gold fell to its lowest since mid-April on Tuesday as the dollar strengthened in the run-up to this week's US jobs report, which is expected to come in strong and could cement the Federal Reserve's recent hawkish stance.

Spot gold fell 0.93% to $1,761.66 per ounce by 01:39 pm EDT (1739 GMT), after touching $1,749.20, its lowest since April 15. US gold futures settled down 1% at $1,763.60.

In addition to a stronger dollar, some investors are likely anticipating better-than-expected jobs data, said Bob Haberkorn, senior market strategist at RJO Futures.

"The calls for interest rates to trend higher are going to be much louder from the Fed if we do get a better-than-expected jobs number," weighing on gold, Haberkorn said.

The US Labour Department's nonfarm payrolls data on Friday is expected to show a gain of 690,000 jobs this month, compared with 559,000 in May, according to a Reuters poll.

The data is due after comments from Richmond Fed President Thomas Barkin, who suggested the Fed had made "substantial further progress" in its inflation goal in order to begin tapering asset purchases.

Growing signs that point to a sooner-than-expected US interest rate hike and the preceding tapering should heap more downward pressure on gold, potentially bringing it down to $1,730, Han Tan, chief market analyst at Exinity Group said.

The dollar index rose 0.2%, making gold more expensive for other currency holders.

But, a broader data disappointment trend could eventually support gold as the market reflects on continued economic risks at a time when markets have priced a first rate hike from the Fed in December 2022, TD Securities said in a note.

In other metals, silver was down 1.3% at $25.75 per ounce, after touching its lowest since April 15 at $25.51. Platinum shed 1.8% to $1,070.30, and palladium slipped 0.5% to $2,673.72.

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