Gold Goes Back to Boring With Volatility at 4-Month LowDebarati Roy and Laura Clarke
Gold is once again leaving investors bored.
The metal’s 30-day historical volatility dropped to the lowest since early November on Thursday, according to data compiled by Bloomberg. Even Mario Draghi’s plan for more bond buying that sent the euro to an 11-year low against the dollar wasn’t enough to spur some movement for gold, with futures trading little changed for most of Thursday in New York.
Prices are up 1.2 percent in 2015, paring gains of as much as 10 percent through mid-January. Gold fell 1.5 percent in 2014, and in the past year the metal is the least-volatile of the 22 components tracked by the Bloomberg Commodity Index. The U.S. Labor Department will release jobs data on Friday that may show more improvement for the economy, allowing the Federal Reserve to raise interest rates sooner.
“For the gold market, the key issue is the Fed interest rate,” David Meger, the director of metal trading at HighRidge Futures LLC in Chicago, said in a telephone interview. “There is very little interest in the market before tomorrow’s numbers.”
Gold futures for April delivery rose 0.2 percent to $1,198.50 an ounce on the Comex at 11:08 a.m. in Singapore. Futures are heading for a 1.2 percent loss this week.
European Central Bank President Draghi said Thursday that the institution’s extended bond-purchase program will start next week and include debt with negative yields. During gold’s 12-year bull run though 2012, government stimulus helped attract investors seeking a hedge against inflation. The metal fell in the previous two years as consumer costs remained stable.
Futures dropped 5.2 percent in February on mounting speculation that the Fed is getting closer to raising borrowing costs. Higher rates cut gold’s allure because the metal generally offers returns only through price gains.
Investors could have more reason to avoid gold this month. Futures dropped 1 percent on average in March, according to data compiled by Bloomberg from the past four decades. Prices fell 65 percent of the time, more than any other month.
Chinese consumers usually buy the metal to celebrate the Lunar New Year that takes place in January or February, leaving less demand after the holiday is over.
Holdings in exchange-traded products backed by gold slipped for a seventh day as of Thursday, falling 0.3 metric ton to 1,667.2 tons, the lowest in a month.
Silver futures for May delivery were little changed at $16.16 an ounce on the Comex.
On the New York Mercantile Exchange, palladium futures for June delivery advanced 0.4 percent to $828.30 an ounce. Platinum futures for April delivery added 0.2 percent to $1,182 an ounce.