Gold slips on strong dollar ahead of U.S. jobs data | Reuters

By Marcy Nicholson and Zandi Shabalala | NEW YORK/LONDON NEW YORK/LONDON Gold prices extended losses to a five-week low on Wednesday as the dollar gathered strength on the prospect of a U.S. interest rate hike.Investors are awaiting February non-farm payrolls data on Friday as a barometer of the U.S.

Reuters March 09, 2017 02:16:08 IST
Gold slips on strong dollar ahead of U.S. jobs data
| Reuters

Gold slips on strong dollar ahead of US jobs data
 Reuters

By Marcy Nicholson and Zandi Shabalala
| NEW YORK/LONDON

NEW YORK/LONDON Gold prices extended losses to a five-week low on Wednesday as the dollar gathered strength on the prospect of a U.S. interest rate hike.Investors are awaiting February non-farm payrolls data on Friday as a barometer of the U.S. economy after Federal Reserve Chair Janet Yellen said last week the central bank was poised to lift rates provided jobs and inflation data held up.These comments were seen as cementing plans for an increase at the Fed's March 14-15 meeting. [FED/DIARY]Spot gold XAU= was down 0.5 percent at $1,209.49 an ounce by 2:59 p.m. EST (1959 GMT), after touching its lowest since Feb. 1 at $1,206.05, putting it on track for its fifth straight session in the red.The most active U.S. gold GCcv1 futures for April delivery settled down 0.6 percent at $1,209.40. "Non-farm payrolls ... will provide final confirmation of a rate hike next week and this could put more pressure on gold," Julius Baer commodities analyst Carsten Menke said

Higher rates tend to put pressure on gold prices because they raise the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.The dollar index .DXY, which pits the greenback against six major currencies, rose 0.3 percent."Despite the recent selloff we think that gold prices have been very resilient, given the circumstances," said Georgette Boele, precious metals analyst for ABN Amro, pointing to the rise in two-year-U.S. Treasury yields and strong U.S. equity markets.

The ADP National Employment Report showed its biggest increase in more than a year in February, suggesting the U.S. economy remains on solid ground."It puts upward pressure on both the consensus and our forecast for payrolls on Friday," said Royce Mendes, director and senior economist at CIBC Capital Markets in Toronto.On the other hand, ETF Securities' Martin Arnold said he expected the backdrop of political risk in France and a lack of policy certainty in the United States to create support for gold prices as the interest rate increase was already priced in.

"And if the Fed doesn't follow up their tough talk with action then its certainly a bullish environment for gold," Arnold said, referring to expectations of three rate hikes this year.In other precious metals, silver XAG= slipped 1.3 percent to $17.26 per ounce, after tapping its lowest since Jan. 31 at $17.19Platinum XPT= fell 1.4 percent to $946.45 per ounce, after falling to $941.50, the lowest since Jan. 5.Palladium XPD= eased 0.8 percent to $766 per ounce. (Additional reporting by Arpan Varghese in Bengaluru; editing by Mark Potter and Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.