Gold futures settled lower Thursday after volatile trading in the wake of fresh U.S. economic data, setting up a Friday’s session during which the monthly employment report will mark the week’s data highlight.
Gold for December delivery GCZ5, -0.21% fell $1.50, or 0.1%, to settle at $1,113.70 an ounce on Comex, the lowest settlement since Sept. 15. Prices spent the day weaving between a high above $1,118 and a low near $1,110. Gold lost 1.5% of its value in September, and nearly 5% in the third quarter.
December silver SIZ5, -0.18% meanwhile, slipped by less than a penny to $14.511 an ounce.
U.S. data Thursday showed that weekly jobless claims rose by 10,000 to a seasonally adjusted 277,000. That is the highest of new claims in a month but the weekly average in 2015 is the lowest since the early 1970s.
The final U.S. Markit PMI manufacturing index totaled 53.1% in September, compared with 53.0 previously, while separate data showed manufacturers grew in September at the slowest pace in more than two years. Construction spending rose in August.
Following the data releases, the ICE U.S. dollar index DXY, +0.08% edged down by 0.2%.
The Federal Reserve has been looking at domestic economic reports to help determine the pace of interest-rate increases, which could influence the price of gold and other dollar-denominated assets.
Higher rates lift the dollar and make gold more expensive for buyers using other currencies. A rate increase also diminishes the attractiveness of precious metals, which don’t offer interest.
The nonfarm payroll report is due Friday, with the economy expected to have added 200,000 jobs, compared with 173,000 the previous month. A number below 150,000 will “start another gold bull rally,” said Chintan Karnani, chief market analyst at Insignia Consultants in New Delhi.
A number around 190,000 to 210,000 will “imply a neutral zone for gold,” he said, while a number over 260,000 could result in gold “getting dumped,” as that would increase the chances of an interest-rate hike in October.
In an interview with The Wall Street Journal, Richmond Fed President Jeffrey Lacker said a rate rise in October is possible. Weakness in the global economic landscape kept Fed policy makers from increasing rates in September.
Looking ahead, Karnani said that geopolitical risk may start to affect gold positively. If “Syrian tension escalates between [the] USA and Russia, gold could witness some short-term investment flows,” he said. It’s “too early for this to happen, but a real possibility in near future.”
In other metals, January platinum PLF6, -0.30% which is now the most-active contract, lost $3.90, or 0.4%, to $905.20 an ounce, while December palladiumPAZ5, -0.64% picked up $28.45, or 4.4%, to $679.40 an ounce.
December high-grade copper HGZ5, -0.13% fell 3.7 cents, or 1.6%, to at $2.305 a pound.