May 5, 2016
Gold Firms After Three Days of Losses as Equities Drop
(Reuters) - Gold firmed after three days of losses on Thursday on weaker global equities, but held below a 15-month peak as the dollar rebounded against the yen after a recent slump.
Asian shares slipped for a seventh session on Thursday after a mixed batch of U.S. economic data. Global equity markets fell for a second straight day on Wednesday.
The greenback firmed broadly on some optimism the U.S. economy would bounce back after nearly stalling in the first quarter. It also recovered against the yen after falling to an 18-month low earlier this week.
Spot gold steadied at $1,280.20 an ounce by 0228 GMT, after losing 1.1 percent in the past three sessions. U.S. gold futures rose 0.6 percent to $1,282.60.
"I think the (gold) market got a little carried away on the long side. At the moment we are just seeing some profit taking and consolidation around these levels," said a Sydney-based precious metals trader.
"The trend is still in place. If we see a soft employment number, gold could climb to $1,300 again," he said.
Gold had jumped to a 15-month top of $1,303.60 on Monday as the dollar slumped against the yen after the Bank of Japan stood pat on policy.
The dollar has been able to regain some ground after data on Wednesday showed that the U.S. services sector expanded in April as new orders and employment accelerated.
But the U.S. growth outlook was dimmed by another report on Wednesday showing private employers hired the fewest number of workers in three years in April.
U.S. interest rates futures rose on Wednesday as the weaker-than-expected private jobs growth in April caused traders to price in lower chances the Federal Reserve will raise interest rates at its June policy meeting.
Gold is sensitive to interest rates and returns on other assets as rising rates lift the opportunity cost of holding non-yielding bullion.
The metal has risen 21 percent this year as expectations faded that the Fed would push ahead with interest rate hikes.
Investor interest in gold remains robust. Assets in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.07 percent to 825.54 tonnes on Wednesday, their highest in over two years.