Gold holds losses as US jobs data boosts rate-hike expectations

By: | Published: August 8, 2016 7:57 AM

Gold on Monday hovered near lows from the previous session, when it fell nearly 2 percent on a firmer dollar after a stronger-than-expected July jobs report likely increased the possibility of a U.S. rate hike this year.

Speculators cut their net long position in COMEX silver contracts for the first time in two months in the week to Aug. 2, but added longs in gold futures and options for the first time in four weeks. (Reuters)Speculators cut their net long position in COMEX silver contracts for the first time in two months in the week to Aug. 2, but added longs in gold futures and options for the first time in four weeks. (Reuters)

Gold on Monday hovered near lows from the previous session, when it fell nearly 2 percent on a firmer dollar after a stronger-than-expected July jobs report likely increased the possibility of a U.S. rate hike this year.

FUNDAMENTALS

* Spot gold had slipped 0.1 percent at $1,333.80 an ounce by 0055 GMT. Bullion touched a low of $1,331.36 Monday, its lowest since July 29. * U.S. gold edged down 0.3 percent at $1,339.90 an ounce.

* The dollar’s broad gains put its index against a basket of six major currencies as high as 96.522 on Friday after the jobs report, rising 1.6 percent from a five-week low touched on Tuesday. It last stood at 96.297.

* U.S. employment rose more than expected for the second month in a row in July and wages picked up, bolstering expectations of faster economic growth, and raising the probability of a Federal Reserve interest rate increase this year.

* Traders on Friday boosted bets that the U.S. Federal Reserve could raise interest rates as soon as December after a government report showed U.S. employers added more jobs than expected last month.

* More top Wall Street banks expect the Federal Reserve to raise U.S. interest rates in 2016 after a strong July jobs report suggested a modest economic pick up in the second half following an anaemic first half, a Reuters poll conducted on Friday showed.

* China’s gold reserves stood at 58.79 million fine troy ounces at the end of July, up from 58.62 million fine troy ounces at the end of June, the central bank said on Sunday.

* Speculators cut their net long position in COMEX silver contracts for the first time in two months in the week to Aug. 2, but added longs in gold futures and options for the first time in four weeks.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.73 percent to 980.34 tonnes on Friday.

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* Asian shares rose on Monday and the dollar stood tall after the more than expected July jobs report lifted confidence in the strength of the U.S. economy.

DATA AHEAD (GMT) China Trade data July 0600 Germany Industrial output June 0830 Euro zone Sentix index August 1400 U.S. Employment trends July.

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