Gold, silver futures settle down on mixed U.S. jobs data

“This will give the market some further clues about how the Fed will be thinking about raising rates”, said Robin Bhar, head of metals research at Société Générale.


Gold prices edged back towards their lowest since mid-August yesterday after United States payrolls data failed to provide clarity on the timing of a Federal Reserve rate hike, and as the dollar steadied against a currency basket.

The most actively traded contract, for December delivery, recently was down $6.10, or 0.5%, at $1,127.50 a troy ounce on the Comex division of the New York Mercantile Exchange.

Investor sentiment has swung wildly as concern mounts around China’s economic slowdown, coupled with signals from Federal Reserve officials that they’re preparing to raise interest rates.

BULLION prices whipped hard on the release of new U.S. jobs data Friday, with gold initially spiking to recover this week’s losses before dropping to fresh lows for the day beneath $1120 per ounce.

Bullion came under pressure on Thursday as the dollar ticked higher after European central bankers cut economic growth targets and left interest rates unchanged. While talking to CNBC last week, Stanley Fischer, Fed Vice Chairman, said it was not the right time to decide whether disturbance in the stock market had made rate increase of September less compelling.

Bullion for immediate delivery climbed as much as 0.8 percent to $1 144.33 an ounce and was at $1 143.30 at 11:13 am in London, according to Bloomberg generic pricing. A strong jobs report could prompt the Fed to increase rates sooner than later.

Liquidity is likely to be thin on Monday as the USA markets are closed for the Labor Day holiday. The uncertainty in this regard is likely to keep the gold price in check in the run-up to the meeting.

The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.

Strength in equities also pressured gold, as investors plumped for assets seen as higher risk. Comex December silver futures ended Friday’s session at $14.544 an ounce, relatively flat on the week.


But “while the Federal Reserve is succeeding in the employment part of its dual mandate”, says a blog at United States bond-fund giant Pimco, “it is significantly undershooting the inflation part”, with the Fed’s own preferred PCE measure reading just 0.3% against the 2.0% per year target, and only 1.2% when “volatile” fuel and food are excluded.

Seized gold bars are kept on display by customs officers at the international airport in Kolkata in this