Gold Edging Higher Ahead Of NFP & US Data

Gold continues to bounce up and down easing higher, but without support. Gold is trading this morning at 1286.40 up by $3.00 with a slew of important US data due as the month comes to close and then the all-important ECB meeting next week and the nonfarm payroll release next Friday. The US data due today and the NFP next Friday will give definite clues as to the possibility of a rate hike in the near future.

Gold has retreated from highs set in July, as a renewed focus on the path of US monetary policy uncovered a budding expectation for higher interest rates among gold traders. Gold doesn’t pay interest or dividends and could struggle to compete with Treasury bonds when rates climb. “The US interest rate story is what’s really going to move gold over the next five years,” said John Payne, a senior market analyst with Daniels Trading in Chicago. The US Federal Reserve is due to end its stimulus efforts this year, opening the door to a tighter policy stance.

This creates a sense of uncertainty for gold traders, as the central bank has indicated its future policy decisions will hinge on the health of the US economy. Still, gold’s losses were muted as ongoing tensions in Eastern Europe and the Middle East continue to stoke investor appetite for the precious metal.

Gold gained for a second day as tensions between Russia and Ukraine spurred haven demand, countering a strengthening U.S. economy and dollar. Bullion for immediate delivery added 0.3 percent to $1,286.83 an ounce. Spot Gold is currently trading at $1285. The SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, is holding 795.60 tonnes as per latest available data on their website. Silver rose 0.3 percent to $19.5235 an ounce. Platinum added 0.1 percent to $1,420.31 an ounce, extending a rebound from $1,413.50 on Aug. 26, the lowest level since May 1. Palladium was little changed at $893 an ounce. The metal is heading for its seventh monthly increase, the longest winning streak since January 2011.

Aluminum traded near an 18-month high on speculation demand is rising amid signs a recovery is gathering pace in the U.S. and before data forecast to show the country’s economy expanded for the second quarter. The metal in London was little changed after rising 1 percent yesterday. The U.S. economy grew 3.9 percent in the three months through June. Consumer confidence unexpectedly rose in August to the highest level in almost seven years, a separate index showed. Copper recovered 2 points to trade at 3.197 after tumbling on Wednesday. News that the Peoples Bank of China changed policy’s and rules giving additional support to lending which is being viewed as a mini stimulus program helping to boost metals outlook for the day.  Copper in London was little changed after closing yesterday at the lowest since Aug. 21. Profit growth at industrial companies in China slowed to 13.5 percent in July from 17.9 percent in June, the fastest rate in seven months.