Gold hits lowest since January

London

Gold fell to its lowest in more than five weeks. Growing expectations that the US Federal Reserve will raise interest rates this month following a better than expected ADP payrolls report on Wednesday have pushed gold down 3 percent this week, potentially its biggest weekly loss in four months. The metal hit a low of $1,194.55 an ounce on Friday, after slipping below $1,200 an ounce in the previous session for the first time since Jan. 31. Spot gold was down 0.38 percent at $1,196.19 an ounce at 1047 GMT, while US gold futures for April delivery were down $6.8 an ounce at $1,196.40. “We had a really quite phenomenal number in the ADP payrolls on Wednesday and when you get such a big move in private payrolls, it would be highly surprising if the official numbers moved lower,” Mitsubishi analyst Jonathan Butler said. A Reuters survey of economists predicted that non-farm payrolls probably rose by 190,000 jobs last month. Fed Chair Janet Yellen said last week the central bank was poised to lift rates provided jobs and inflation data held up, comments seen as cementing plans for an increase at the Fed’s March 14-15 meeting. “If we see a very good payroll number today and also hawkish comments from the Fed next week, we could break out of this longer-term downtrend in fixed income, in the 10-year yield and that is going to change the game as far as real rates are concerned,” Butler said. “That is going to have a negative impact on gold.” Pointing to softening investor appetite, holdings of the world’s largest gold-backed exchange-traded fund.—Agencies

Share this post

PinIt
    scroll to top