- Gold futures pared a decline to a 15-week low after a report showed that the U.S. added fewer jobs in June than forecast and wages stagnated, reflecting a more moderate pace of economic growth.
Earlier, gold fell as much as 1.2 percent amid concerns the Federal Reserve is moving closer to raising interest rates for the first time in nine years. Global holdings in exchange-traded funds backed by the metal last month slumped to the lowest since 2009.
Gold on Tuesday capped the fourth straight quarterly decline, the longest skid since June 1997, partly as demand for a haven declined. The U.S. economy has completed its sixth year of expansion since the recession ended in June 2009. While the job market has rebounded, faster wage growth has been slow to follow.
The jobs report “is giving gold some support,” Tai Wong, the director of commodity-products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. “The weaker-than-expected print and revisions lower, in addition to flat average hourly earnings, do not get the Fed incrementally closer” to a rate increase.
Gold futures for August delivery fell 0.5 percent to settle at $1,163.50 an ounce at 1:43 p.m. on the Comex in New York. Earlier, the price touched $1,155.80, the lowest for a most-active contract since March 18.
The addition of 223,000 jobs followed a 254,000 increase in the prior month that was less than previously estimated, a government report showed Thursday. The median forecast in a Bloomberg survey called for a 233,000 advance in June.
Average hourly earnings at private employers held at $24.95. They increased just 2 percent over the 12 months ended in June, following a 2.3 percent gain the prior month, and posted a 2 percent gain on average since the current expansion began.
“People are worried about wages remaining stagnant, and are now questioning a September rate rise,” Chris Gaffney, the president at EverBank World Markets in St. Louis, said in a telephone interview.
An improving outlook for the labor market is among the reasons Fed policy makers have said they may begin to raise the benchmark rate this year from near zero. Higher rates curb the appeal of the metal, which doesn’t pay interest like assets including bonds.
Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore and the most-accurate forecaster for precious metals according to a Bloomberg survey, sees gold dropping to $1,050 by the end of this year. That’s a level not seen since 2010.
Silver futures for September delivery fell 0.1 percent to $15.562 an ounce on the Comex. Prices fell for a sixth straight session, the longest slump since March 2014.
Palladium futures for September delivery fell 1 percent to $694.15 an ounce on the New York Mercantile Exchange. Platinum futures for October delivery slipped 0.3 percent to $1,084 an ounce.