Gold futures climbed Wednesday, garnering support from weakness in U.S. stocks despite better-than-expected figures on private-sector jobs.
The ADP report is viewed as a precursor to the more closely watched government-employment report due Friday, which could help determine the yellow metal’s next direction.
April gold GCJ6, +1.00% marched $11, or 0.9%, higher to trade at $1,241.80 an ounce. Prices settled with a loss of 0.3% a day earlier.
Gold looks to continue to generally trade inversely with the stock markets, said Fawad Razaqzada, technical analyst at Forex.com and City Index.
The metal has “managed to hold its own pretty well,” falling “moderately” on days when stocks and the dollar have risen sharply, he said. That “either suggests that a big breakout is on the way or a big selloff” is on tap.
“It will depend on which direction gold will break out from its recent consolidation range between $1,200 and $1,250,” said Razaqzada. “If U.S. data this week help to increase the likelihood that the [Federal Reserve] may raise rates in June, then that could be the trigger for a selloff in gold.”
The U.S. private sector added 214,000 jobs in February, ADP reported Wednesday, more than economists had expected.
Naeem Aslam, chief market analyst at AvaTrade, said the ADP report, although strong, only sets the tone for the important Friday jobs report, adding that until that data emerge, “traders will not be playing with a full deck of cards.”
“If we look at the odds of Fed raising [interest] rates, then [it’s clear] that they do look a lot better in contrast to what they were a couple of weeks ago,” Aslam said. Higher rates can boost the dollar DXY, -0.08% and make gold less competitive against interest-bearing investments.
But for now, with the U.S. stock market failing to get much of a boost from the upbeat ADP data and crude-oil prices sliding lower on worse-than-expected inventories, gold has attracted some investor attention.
Among other metals, May silver SIK6, +1.76% added 20.4 cents, or 1.4%, to $14.96 an ounce, while May copper HGK6, +1.70% added 3 cents, or 1.4%, to $2.175 a pound.
April platinum PLJ6, -0.04% traded at $937.70 an ounce, up $1, or 0.1%, while June palladium PAM6, -0.12% shed $2.05, or 0.4%, to $515.30 an ounce, pulling back after a 4.4% climb a day earlier.
Source: MarketWatch
