The spot gold price managed a slight rebound during Asian trading hours on Wednesday morning after falling to a two-month low on Tuesday.
Spot gold was last at $1,314.75-1,315.05 per ounce, up $2.90 from Tuesday’s close. Trading ranged at $1,310.30-1,315.55 so far after slipping to a two-month low of $1,309.20 on Tuesday.
“The stronger US dollar and Fed rate hike expectations are proving to be key hurdles for gold. An increase in US consumer confidence in August, reported on Tuesday, acted as an additional brake,” Credit Suisse said on Wednesday morning.
The US dollar index had hit a three-week high of 96.14 on Wednesday. It was last at 95.94 down 0.08 percent.
The US CB consumer confidence in August came in at 101.1 on Tuesday, above the forecast of 97.2.
“Still, we note that gold investors remain optimistic as speculative positioning continues to be very long. This is important because without the support from investors, gold would be vulnerable…given the persistent weakness in primary demand, that is, demand from jewellery, industrial use and central banks,” Credit Suisse added.
Investors are expected to remain cautious ahead of Friday’s US jobs report which will likely determine whether the US Federal Reserve will lift interest rates in the near-term. Market expects August’s non-farm employment change at 186,000.
Hawkish comments from Federal Reserve chairwoman Janet Yellen and other Fed speakers last Friday have lifted expectations of a rate hike this year.
Market participants on Tuesday saw a 24 percent chance of a hike in September, with majority expecting an increase only in December, according to the CME FedWatch Tool.
In other US data released Tuesday, the S&P/CS composite-20 HPI year-over-year in June was in-line with projections at 5.1 percent growth.
Key US data due later today includes the ADP non-farm employment change – which will offer a preview to the official payrolls data on Friday – as well as the Chicago PMI, pending home sales and crude oil inventories.
In other commodities, the Brent crude oil spot price fell 0.1 percent to $48.62 per barrel, while the Texas light sweet crude rose 0.15 percent to $46.24 recently on Wednesday.
In equities, the Shanghai Composite is down 0.11 percent to 3,071.17 so far on Wednesday.
In other precious metals, silver was last at $18.715/18.735, up $0.11. Platinum was recently at $1,058/1,065, up $6.50, and palladium gained $11.5 to $683/692 recently on Wednesday.
On the Shanghai Futures Exchange, gold for December delivery was last unchanged at 285.15 yuan per gram, and the December silver was flat at 4,176 yuan per kilogram.
The post Gold bounces but stays capped by stronger US dollar appeared first on The Bullion Desk.
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Source: Bullion Desk News
