Gold Prices Near 4-Week Low After U.S. Employment Data, Rate Hike Fears

Gold Prices Near 4-Week Low After U.S. Employment Data, Rate Hike Fears

The prices of gold were languishing near 5-week low on Wednesday after better US jobs is expected, hit by concerns a rise in US rates this year and outflows of investors.

Gold for December delivery on the Comex tacked on $3.50, or 0.31%, to trade at $1,117.60 a troy ounce.

Spot gold had ticked up 0.4 per cent to $1,121.30 an ounce, after sliding over 4 per cent in the last five sessions.

Bullion has come under pressure since last week the Federal Reserve made reference to a rate hike in December, reversing the previous market expectations that the first rate increase in the United States in nearly a decade might be delayed until next year concerns on global growth.

Gold tends to take advantage of very low rates as an asset do not pay interest.

ADP agency said non-farm private employment rose by 182,000 last month, above the expectations of a 180,000 increase. The economy created 190,000 jobs in September, whose figure was revised down from a previously reported increase of 200,000.

A separate report showed the US trade deficit contracted by 15% in September to hit a seven-month low of $ 40,810,000,000. Analysts hoped that the US trade deficit narrows to $ 41.1 billion from a deficit of $ 48.02 billion in August.

The market agents now looked forward to a report on NFP on Friday. The consensus forecast is that the data show an increase of 182,000 jobs in Octoberfollowing a surge of 142,000 in September, while it is expected that the jobless rate to hold steady at 5.1%.

A strong US NFP report was likely to add to the speculation that the Federal Reserve will begin to raise interest rates, while a weak number could undermine the argument for a rate hike early.

Amid positive cues from the global market, at the Multi Commodity Exchange, gold for delivery in far-month February moved up by Rs 124, or 0.47%, to Rs 26,240 per 10 grams.

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