Precious Metals Price Watch: Gold Steady Ahead Of U.S. Jobs Data

on Jun 5, 2013

The gold price hovered at $1,400 an ounce on Wednesday, June 5, with investors turning their attention to U.S. non-farm payroll readings due on Friday. Silver and platinum edged higher.

**Gold Price Stays Close to $1,400 an Ounce**
The gold price steadied below $1,400 an ounce on June 5, with spot gold trading at $1,398.40 an ounce as at 09:23 GMT, newswires reported. Earlier, spot gold traded at $1,405.06, whereas bullion for August delivery gained 0.5 percent to trade at $1,404.20 an ounce on the Comex.
“The market is still sitting in a fairly tight range ahead of the U.S. jobs report,” noted Andrey Kryuchenkov, an analyst at VTB Capital, as quoted by Reuters. “This will determine short-term direction.” Market participants are closely watching monthly payrolls data in the world’s largest economy because the US Federal Reserve has tied its bond-buying programme, which has helped drive gold to record highs in

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recent years, to the health of the U.S. jobs market.
“Players will especially pay attention to non-farm payrolls following some hawkish comments from the Fed member lately,” VTB Capital’s Kryuchenkov added. Kansas City Fed President Esther George said on Tuesday that slowing the pace of bond buying would help wean financial markets off their dependence on cheap money from the central bank.

Reuters quoted Joyce Liu, an investment analyst at Phillip Futures, as saying that traders were positioning themselves for the upcoming labour data in the U.S. “If the data is weak, there will be stronger justification for letting the bond-buying stay a while longer,” Liu noted.
**Physical Demand Concerns**
New restrictions on gold imports in India, the world’s largest consumer of the precious metal, have sparked concerns of slowing demand in the country. On Tuesday, India extended a ban on deposit-based purchases to cover all imports apart from those used for making jewellery for export. The announcement came after data showed on Monday that gold imports in the country had jumped to around 162 tonnes in May from 142.5 tonnes in April.

“Markets are speculating that the India ban would reduce imports in June,” said Phillip Futures’ Liu, as quoted by Reuters. “It makes sense because we don’t have any major festival in June like we had in April and May.” In India, gold is bought in abundance for weddings and festivals.
Meanwhile, demand from China, the world’s second-largest gold consumer, has cooled down. The country’s total gold imports from Hong Kong fell to 125.715 tonnes in April from a record high of 223.519 tonnes in March. According to Tian Rui, vice president of the precious metals division at INTL FCStone Trading Co, some qualified banks had used up their gold import quota in the first three months and were unable “to get the paperwork done fast enough to bring in bullion in April”.

!m[The platinum price also increased, climbing 0.4 percent to $1,499.50 an ounce](/uploads/story/2795/thumbs/pic1_inline.png)
**Platinum and Silver Edge Higher**
The silver price rose on Wednesday, with cash silver gaining 0.4 percent to trade at $22.6295 an ounce as at 14:12 SGT. The platinum price also increased, climbing 0.4 percent to $1,499.50 an ounce. One of the world’s largest platinum producers, Impala Platinum Holdings Ltd (OTCMKTS:IMPUY), said that workers at one of its South African mines had started an unauthorised strike. Last year, labour unrest in the country’s mining sector disrupted supplies and contributed to a shortage in the platinum market.


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Commodity Precious Metals