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Gold futures climbed on Wednesday, on track to notch a third straight session gain, with an unexpected monthly fall in U.S. private-sector jobs, weakness in the dollar, and a further retreat in yields for government debt helping prices climb further above $1,800 an ounce.
The precious metal is “relatively calm given a substantial miss in ADP jobs report,” Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch.
Privately run U.S. businesses reduced employment by 301,000 jobs in January –- the biggest drop since the start of the pandemic. Economists surveyed by The Wall Street Journal had forecast a 200,000 gain.
Part of gold’s “muted reaction” is understanding the impact of the omicron surge and the 154,000 decrease in jobs was in the hospitality industry, said Wright. “This could be a temporary slip in the health of the jobs market.”
April gold
GCJ22,
GC00,
rose $2.20, or 0.1%, to trade at $1,803.70 an ounce, following a 0.3% advance on Tuesday, when prices marked the highest settlement for a most-active contract since Jan. 26, FactSet data show.
The move for gold comes as the 10-year Treasury note BX:TMUBMUSD10Y yields 1.77%, down by about 3 basis points from its levels Tuesday afternoon, while the dollar was down 0.4%, as gauged by the ICE U.S. Dollar Index DXY, a gauge of the buck against a half-dozen other currencies.
“Gold is hovering right above $1,800 and there is meaningful safe haven interest with market volatility along with the Ukraine crisis to support this level,” said Wright. “I do not see gold breaking out much higher, but rather having a measure of support at $1,750 on any pullback.”
Bullion has been buoyant so far in 2022 but the precious metal remains caught in a relatively tight range with $1.850 serving as an area of resistance, against the prospective of the Federal Reserve launching a regime of higher interest rates.
“More definitive signs of economic weakness might curtail the Fed’s desire to check inflation,” Peter Grant, vice president and senior metals strategist at Zaner Metals and Tornado Bullion Solutions. “That would set a more favorable tone in gold above $1,800, returning focus to last week’s high at $1,853.78.”
However, “at this point, focus is on Friday’s jobs report,” he said. See economic calendar
Meanwhile, silver for March delivery
SIH22,
SI00,
was trading a half cent higher at $22.605 an ounce, after rising 0.9% a day ago.
March copper
HGH22,
tacked on 0.2% to $4.444 a pound. April platinum
PLJ22,
rose 1.6% to $1,039.30 an ounce and March palladium
PAH22,
traded at $2,369.50 an ounce, up 1%.
