Gold slips towards 5-1/2 year low after jobless claims report
Investing.com – Gold prices slipped back towards the lowest level in more than five years on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. rose less than expected last week, holding near the lowest level since November 1973.
for December delivery on the Comex division of the New York Mercantile Exchange dipped $1.30, or 0.12%, to trade at $1,084.30 a troy ounce during U.S. morning hours after hitting a session low of $1,082.70 overnight.
A day earlier, gold shed $5.10, or 0.47%, to close at $1,085.60. Futures fell to a five-and-a-half year low of $1,072.30 on July 24. Gold prices lost $79.50, or 6.72%, in July, the biggest monthly decline since June 2013.
The U.S. Department of Labor said the number of individuals filing for rose by 3,000 last week to 270,000. Analysts had expected initial jobless claims to rise by 6,000 to 273,000 last week from the previous week’s total of 267,000.
First-time jobless claims have held below the 300,000-level for 22 consecutive weeks, which is usually associated with a firming labor market.
Market players now looked ahead to Friday’s U.S. nonfarm payrolls report, amid ongoing expectations for a September rate hike. The consensus forecast is that the data will show jobs growth of 223,000 last month, while the jobless rate is forecast to hold steady at 5.3%.
Data on Wednesday showed that in the U.S. grew at the fastest pace since August 2005 in July, while data rose at the slowest pace in three months.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve will raise interest rates in September for the first time since 2006.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 98.14 early on Thursday, not far from the previous session’s three-month peak of 98.33.
The greenback has been boosted recently by expectations that the improving U.S. economy will prompt the Federal Reserve to raise short term interest rates as early as September.
Also on the Comex, for September delivery shed 2.8 cents, or 0.19%, to trade at $14.52 a troy ounce.
Elsewhere in metals trading, for September delivery inched down 0.8 cents, or 0.33%, to trade at $2.341 a pound during morning hours in New York.
Copper tumbled to a six-year low of $2.321 on August 3, following the release of disappointing .
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.