Gold Prices Dip as Focus Shifts to U.S. Jobs

Gold prices traded slightly lower in holiday-thinned trade on Thursday but remained supported by expectations for central bank easing ahead of the U.S. employment report.

Comex gold futures fell $3.85, or 0.3%, to $1,417.05 a troy ounce by 8:54 AM ET (12:54 GMT).

Despite the dip, gold remained on track to log a seventh straight week of gains, bolstered by the U.S. President Donald Trump’s nomination of two dovish candidates for the Federal Reserve and a surprise announcement that Christine Lagarde will be the head of the European Central Bank.

Markets took the news to mean that the way is cleared for both the Fed and the ECB to comply with expectations that the central banks will move forward with policy easing.

In a falling interest-rate environment, investor appetite for gold strengthens as the opportunity cost of holding the precious metal decreases relative to other interest-bearing assets such as bonds.

With U.S. investors celebrating the Fourth of July holiday, market focus shifted to Friday’s publication of the U.S. jobs report.

Weaker-than-expected readings could cement expectations that the Fed will cut interest rates at its July 30-31 policy meeting.

The ADP payrolls data released Wednesday showed that the private sector only added 102,000 jobs in June versus the 140,000 that were expected.

Other numbers this week were also supportive of the central bank easing monetary policy, with factory orders for May down 0.7% and the ISM non-manufacturing index falling to 55.1 in June.

Elsewhere in metals trading, silver was little changed at $15.332, platinum dropped 0.4% to $840.40, palladium traded down 0.9% to $1,551.20, while copper lost 0.3% to $2.676 a pound.