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Gold futures declined on Thursday as Treasury yields rose on data showing strength in U.S. private sector employment and the service sector which raised the likelihood of further interest-rate hikes by the Federal Reserve.
Price action
-
Gold futures for August delivery
GC00,
-0.62% GCQ23,
-0.62%
declined by $16.60, or 0.9%, to $1,910.50 per ounce on Comex. -
Silver futures for September delivery
SI00,
-2.25% SIU23,
-2.25%
fell by 54 cents, or 2.3%, to $22.86 per ounce. -
Palladium futures for September
PAU23,
-2.18%
lost $34.90, or 2.8%, to $1,223 per ounce, while platinum futures for October
PLV23,
-2.11%
shed $25.40, or 2.8%, to $899.60 per ounce. -
Copper futures for September delivery
HGU23,
-0.92%
fell by 4 cents, or 1.1%, to $3.73 per pound.
Market drivers
A “hot ADP report and impressive ISM services report” raised the odds the Fed might have to do deliver more rate hikes beyond the July FOMC meeting, said Edward Moya, senior market analyst at OANDA, in emailed commentary.
“The labor market is not loosening at all,” he said, according to the latest ADP report, which showed that the U.S. private sector added 497,000 jobs in June, the biggest increase since July 2022. Economists polled by the Wall Street Journal had forecast a gain of 220,000 private-sector jobs.
Separately, an Institute of Supply Management barometer of business conditions at service sector companies rose to 53.9% in June from 50.3 in the prior month. Economists polled by the Wall Street Journal had expected the index to rise to 51.3%.
If the official U.S. jobs data due out Friday confirm the strength in current data, “markets should be prepared for further decisive rate hikes,” said Alex Kuptsikevich, the FxPro senior market analyst.
Higher rates boost the dollar and make gold less competitive against interest-bearing investments.
In Thursday dealings, the ICE U.S. Dollar Index
DXY,
a gauge of the currencies strength, rose 0.2% at 103.56, weighing on dollar-denominated prices of the precious metal.
Minutes from the latest Federal Reserve policy meeting released on Wednesday showed senior Fed officials support more interest rate hikes later this year.
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