Gold Declines From Three-Week High as Dollar Advances, Fed Looms
(Bloomberg) - Gold retreated from a three-week high as the dollar strengthened after an employment report offset concern that the U.S. labor market is slowing.
Bullion for immediate delivery lost 0.2 percent to $1,267.09 an ounce as of 8:53 a.m. in Singapore, after climbing to $1,271.80 a day earlier, the highest since May 18, according to Bloomberg generic pricing.
The metal pared a second weekly gain to 1.8 percent as the dollar climbed from a one-month low afer data on Thursday indicated U.S. initial jobless claims unexpectedly fell last week. Gold had been supported by indications that policy makers won’t rush to raise interest rates.
“Expectations of a June rate hike have evaporated,” Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said by e-mail. “However, next week’s Fed meeting still brings some risks. Any comments suggesting conditions are still conducive to rate hikes could hinder gold’s upward trend.”
The Federal Open Market Committee will end a two-day meeting on June 15 with a policy statement, revised economic projections and a news conference. Traders have cut back their bets for a Fed rate increase, now pricing in no chance of a boost in June. December is the first month with at least even odds of a rate increase.
Gold has gained 19 percent this year as low, or negative, rates boost the appeal of the metal, which doesn’t pay interest, while a sputtering dollar and concerns over economic growth spur demand for bullion as a store of value.