Gold declined for a second day as global equities and the dollar strengthened before employment data that may provide clues on the outlook for interest rates in the U.S.
Economists surveyed by Bloomberg expect data tomorrow to show U.S. employers added 200,000 or more jobs for an 11th month, backing the case for higher borrowing costs. Global stocks rose and the dollar gained today.
Minutes from the Federal Reserve’s December monetary policy meeting showed policy makers expect the economy to continue improving, though it’s unlikely the central bank will raise interest rates before late April. With the economy strengthening and unemployment falling, the Fed in December dropped a pledge to keep interest rates low for a “considerable time.”
“Gold downside pressure is likely to build towards the anticipated mid-year rate hike,” UBS Group AG analysts Edel Tully and Joni Teves said in a report today. Still, “although the macro environment, particularly in the U.S., remains generally unfriendly towards gold, there is little urgency to aggressively push gold prices lower right now.”
Gold for immediate delivery fell 0.3 percent to $1,207.56 an ounce by 9:53 a.m. in London, according to Bloomberg generic pricing. It reached a three-week high two days ago. Gold for February delivery declined 0.3 percent to $1,207.60 on the Comex in New York.
Global holdings in exchange-traded products backed by the metal fell for a second day yesterday and are at the lowest since April 2009, data compiled by Bloomberg show.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose to trade near its highest level since the data began in 2004.
Silver for immediate delivery fell 0.8 percent to $16.4035 an ounce in London. Platinum was unchanged at $1,218.50 an ounce and palladium lost 0.3 percent to $788.75 an ounce.
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