Gold steady but US job data point to downward trend

Gold prices were unchanged at 19,100 baht per baht-weight in Bangkok on Saturday.

The Gold Traders Association announced the buying price at 19,100 baht and the selling price at 19,000 baht per baht-weight for bullion.

For ornaments, the buying and selling prices were 18,722.60 baht and 19,500 baht per baht-weight respectively.

On Friday, the prices were adjusted once, down 100 baht per baht-weight from Thursday.

But Bloomberg reported from New York on Saturday gold futures fell to the lowest in two weeks as the US unemployment rate dropped to a seven-year low, fuelling speculation that the Federal Reserve will raise interest rates this month.

The jobless rate fell to 5.1% in August, the lowest since April 2008, a government report showed on Friday. Average hourly earnings climbed more than forecast and workers put in a longer workweek. The Fed is weighing whether the economy is strong enough to tighten monetary policy, which would curb the appeal of gold because the metal doesn’t pay interest.

Bullion prices in August posted the first monthly gain since May as a retreat in global stocks and a devaluation in China’s currency fuelled speculation that the Fed would hold off on raising interest rates this month. The Fed has signalled that it’s likely to raise rates this year for the first time since 2006 as the labor market improves.

“Employment headlines are back to pre-crisis levels, and that builds up the story of the US recovery,” Alfonso Esparza, a senior currency analyst at OANDA in Toronto, said in a telephone interview. “If the Fed manages to get one rate hike in this year, that would be something to put downward pressure on gold.”

Gold futures for December delivery fell 0.3% to settle at $1,121.40 an ounce at 1.46pm on the Comex in New York, after dropping to $1,115.70, the lowest since Aug 19.

Holdings in exchange-traded products backed by gold fell 0.9 tonnes to 1,522.4 tonnes, according to data compiled by Bloomberg as of Thursday. Assets are near the lowest since 2009.