Gold edges higher in Asia Investing.com – Gold inched higher in Asia on Thursday with investors looking ahead to end of the week data from the U.S. that should set the tone for a Federal Reserve rate hike this month.
On the Comex division of the New York Mercantile exchange, gold for February rose 0.10% to $ 1,053.40 a troy ounce.
Silver for March delivery rose 0.14% to $ 14.010 a troy ounce, while for March delivery rose 0.04% to $ 2.045 a pound.
Overnight, fell to fresh six-year lows on Wednesday, as relatively hawkish comments from Federal Reserve chair and the release of optimistic employment data pushed the dollar to a yearly-high and augmented the case for a short-term interest rate hike by the U.S. central bank in two weeks.
Gold extended earlier losses on Wednesday morning when the said in its National Employment Report that U.S. private employers added 217,000 jobs in November, up from 182,000 a month earlier. Analysts expected to see gains of 183,000 in the November report.
The unexpected surge provides a strong harbinger for Friday’s critical , the last before the Federal Open Market Committee holds a two day meeting on Dec. 15-16. Hawkish arguments for December lift-off gained momentum early last month after a robust employment report provided signals that the economy could handle the first upward move in rates in nearly a decade.
In the October report, the U.S. Department of Labor said nonfarm payrolls jumped by 271,000 while the unemployment rate ticked by 0.1 to 5.0%. Analysts expect the unemployment rate to hold steady at 5.0% and expect to see solid job gains of 190,000. In terms of average hourly wages, analysts expect an increase of 0.1 to 0.3%, following a major jump of 0.4% in October. Wages have been sluggish for more than a year.
The Fed would like to see improvements in the economy and labor market, as well as signals that long-term inflation is moving toward its targeted goal of 2% before it raises rates. The FOMC’s benchmark Federal Funds Rate, the rate offered on overnight interbank loans at the New York Fed, has remained at near-zero levels since December, 2008.
A rate hike is viewed as bearish for gold, which is not attached to interest rates and struggles to compete with high-yield bearing assets.
In remarks before the Economic Club of Washington on Wednesday, Yellen said financial and economic data since the Fed last met in October has been in line with the Fed’s expectations of continued improvements in the labor market. In addition, Yellen noted that further delays in policy normalization could result in “abrupt tightening” that may disrupt financial markets and perhaps even “inadvertently push the economy into recession.” Still, Yellen emphasized that data before the FOMC’s December meeting has the potential to sway the Fed’s decision.
Earlier, Atlanta Fed president Dennis Lockhart said he believes there is a “compelling case,” for the Fed to raise rates at the meeting. San Francisco Fed president John Williams is also scheduled to make an appearance later in the day.
Before Friday’s report, the European Central Bank is widely expected to ramp up its comprehensive bond buying program at a closely watched meeting on Thursday. The potential divergence between central banks in the U.S. and the euro zone has sent the dollar soaring in recent weeks.
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Gold costs achieve barely in Asia with concentrate on U.S. jobs knowledge
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