Gold Eyeing $1,500 Again

Gold Eyeing $1,500 Again

Gold eyeing $1,500 again this morning on safe haven investing. The yellow metal had rebounded Tuesday when weak U.S. manufacturing data for September spurred fears of a global economic slowdown. Gold received a further boost from this morning’s ADP U.S. new jobs report which fell shy of expectations furthering economic growth concerns.

Private sector employment increased by 135,000 jobs in September, but the August number was 157,000. According to ADP: “The average monthly job growth for the past three months is 145,000, down from 214,000 for the same time period last year.”

The yellow metal had traded below the key $1,500-an-ounce threshold on Comex for a third consecutive day. The December gold contract rose 1.1% Tuesday to settle at $1,489 an ounce on Comex. Currently the December contract is at $1,499.70.

U.S. manufacturing last month posted the biggest contraction since June 2009 — at the end of the Great Recession — according to Institute for Supply Management data released Tuesday. The ISM manufacturing index fell to 47.8% last month from 49.1% in August. The Standard & Poor’s 500 Index fell the most in five weeks on the news.

Investors continue to closely watch the state of the global economy, the possibility of further monetary easing, geopolitical tensions and the U.S.-China trade dispute.

The key U.S. monthly jobs report also comes out Friday, and Federal Reserve Chairman Jerome Powell is scheduled to speak the same day. Patrick Harker, the President Of the Philly Fed, is due to speak at 9 a.m. EDT today and John Williams, President of the NY Fed, is set to speak at 10:50 a.m. EDT, so watch for reactions.

The CME FedWatch Tool shows that 72.2% of investors think the Fed will cut interest rates by 25 basis points for a third consecutive time on Oct. 30, compared with 53.9% a week earlier. The probability of no change is currently 27.8%, compared with 46.6% the previous week.

China, which celebrated the 70th anniversary of Communist rule this week could take a much harder line on Hong Kong now that the celebrations are over, CNBC reported, citing analysts. Police fired live rounds at protesters in Hong Kong during the commemorations, the BBC said.

British Prime Minister Boris Johnson is set to unveil his final Brexit offer to the European Union on Wednesday, the BBC reported. The United Kingdom is scheduled to leave the EU at the end of this month.

Silver advanced 1.8% Tuesday, with the December contract settling at $17.30 an ounce on Comex. The metal had plummeted 3.7% on Monday and remains lower for the week. Currently, the December contract is at $17.530.

Spot palladium, which hit repeated records in September, dropped 1.1% Tuesday and was down 1.6% in the first two days of the week, but this morning it has climbed over $20 an ounce. Spot platinum decreased 0.6% Tuesday but is on the upswing once again this morning.


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