Gold Futures Settle Lower As Dollar Rises On Jobs Data, Rate Hike Bets

Gold futures snapped a four-session winning streak and ended lower on Thursday as the dollar climbed higher against other major currencies.

The dollar firmed, riding on hawkish Fed minutes that suggested the central bank will hold rates at higher levels, and data showing a bigger than expected jump in U.S. private sector employment in the month of December.

The dollar index surged to 105.27 in late morning trades, and despite easing to 104.99, was firmly placed in positive territory with a gain of over 0.7%.

Gold futures for February ended down $18.40 or about 1% at $1,840.60 an ounce, after having settled at a near 7-month high at $1,859.00 an ounce on Wednesday.

Silver futures for March ended lower by $0.540 at $23.424 an ounce, while Copper futures for March settled at $3.8210 per pound, down $0.0805 from the previous close.

Payroll processor ADP’s report today showed private sector employment in the U.S. jumped by much more than expected in the month of December, rising by 235,000 jobs in December after surging by an upwardly revised 182,000 jobs in November.

Economists had expected employment to jump by about 150,000 jobs compared to the addition of 127,000 jobs originally reported for the previous month.

While the stronger than expected job growth points to continued strength in the labor market, the data has added to concerns about the outlook for interest rates.

Edward Moya, Senior Market Analyst at The Americas OANDA, says the ADP private payrolls report and weekly jobless claims reminded traders that the labor market is nowhere near cooling.

Moya says that the economy is clearly weakening, but the labor market stays steady. “It should start to weaken and jobless claims will climb much higher starting next week,” he says.

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