Traders Have Disappeared From the Gold Market

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As gold continues to languish near its lowest price in five years, one element seems to be missing: traders.

Volume so far in August, already a slow time of year, has dropped about 8 percent from 2014. On Thursday, trading was about 40 percent below the 100-day average. With fewer participants, the metal’s volatility has tumbled to the lowest in nine months.

Gold traders are awaiting a U.S. jobs report due on Friday. A gain for employment could push the Federal Reserve to tighten monetary policy sooner, cutting the appeal of bullion because it doesn’t pay interest.

The declines in volatility show that the “market isn’t that interested” in gold as “fewer people are trading it,” Tai Wong, the director of commodity-products trading at BMO Capital Markets Corp. in New York, said by telephone. “The expectations of higher interest rates will keep a cap on it.”

Gold futures for December delivery rose 0.4 percent to close at $1,090.10 an ounce Thursday on the Comex in New York.

The metal’s 60-day historical volatility was near 11.8 on Thursday, the lowest since late October. Money managers have stayed net-short on the metal for two straight weeks, and banks including Goldman Sachs Group Inc. predict more declines for prices.