GOLD PRICES jumped back above $1200 per ounce for Dollar investors Wednesday afternoon in London, adding 1.8% from the day's low as Euro prices hit 8-week highs after US jobs data came in well below consensus forecasts.
The private-sector ADP report – a precursor to Friday's official Bureau of Labor Statistics' estimate of non-farm payrolls – said net hiring totaled only 189,000 last month, badly missing the Street's 225,000 expectation.
Data for both US construction spending and manufacturing activity then missed forecasts as well.
Longer-term interest rates fell, with 10-year US Treasury yields hitting the lowest level since early February at 1.86%.
New York's stock markets opened the day lower, while European shares followed Asia in rising towards the close.
"Given what we know today," said Richmond Fed president Jeffrey Lacker in a speech Tuesday, "a strong case can be made that the federal funds rate should be higher than it is now.
"Unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting."
But pushing back its forecast for a US rate rise from the current 0%, "A June rate hike would have exposed a weak gold price floor," says London market maker and LBMA Gold Price participant Barclays Bank, "whereas in September, physical demand tends to strengthen in light of seasonal buying in India."
A fall hike by the Fed should see physical gold demand from Asia help "buffer prices," Barclays concludes, but higher US interest rates will still "likely to lead to disinvestment."
"General theme continues," said a trading note from Standard Bank's London office earlier – "oversupplied commodities markets triggering reduction in 'diversification' and outright investments; and overall increase in shorts vs long liquidation."
But "following yesterday's sell off, China was back as a buyer today," says an Asian trading note from Swiss refining and finance group MKS.
China's main wholesale gold price held $2.40 per ounce above comparable quotes for London settlement, some 90 cents below the average incentive offered to importers so far in 2015.
Trading volume in Shanghai's main domestic gold contract totaled only 60% of the last 6 months' average.
But trading in the international board's main contract – the iAu9999 contract launched last summer for foreign institutions to trade Shanghai-stored gold using the Yuan currency – jumped almost to the same level, rising from the last 5 weeks' average of 28% to equal 96% of the main bourse's contract volume, just shy of Monday's new record high in Yuan terms.
After waiving storage and dealing fees for international banks using the iSGE board for the first 6 months of this year, the "authorities continue to encourage trading by foreign institutions" in the new contracts, said Metals Focus director Nikos Kavalis at yesterday's London launch of the consultancy's 2015 gold yearbook, adding that foreign players will no longer have to transfer metal to the main domestic bourse.
Gold imports to China, however, made only a "sluggish start" to 2015 on Metals Focus' data, with the consultancy estimating the lowest Q1 inflows since 2012, down by more than 25% from the first 3 months of 2014.
Wednesday's weak US data meantime saw the Dollar little changed on the FX market, trading near a 1-week high to the Euro.
That let the gold price for Eurozone investors jump above €1115 per ounce, its highest level since 5th February.
The import tariff value is the base price at which customs duty is determined to prevent under-invoicing. It is revised on a fortnightly basis taking into account global prices.
London Bullion Market Association has announced a sharp decline in its gold and silver trading activities during February.
Peruvian gold and silver production advanced year-on-year during February. Most of the yellow metal production came from the Yanacocha mine of Newmont Mining of Colorado and the Canadian company Barrick Misquichilca.
BUY GOLD bids outweighed offers at the benchmark LBMA Gold Price auction on Tuesday afternoon in London, with that wholesale market clearing at $1187 per ounce to close the first quarter of 2015 some 1.0% down from end-2014.
World stock markets followed Shanghai lower after Chinese equities dropped more than 1% from fresh 7-year highs.
Major government bond prices rose, edging 10-year US Treasury yields down to 1.94% – markedly below 2015's opening level of 2.13% – while crude oil held 10% below New Year at $48 per barrel.
Silver rallied from an earlier slide to $16.45 per ounce in spot trade – almost $1 below Thursday's 5-week high – to clear at $16.60 midday in London.
Silver remains the only precious metal to show a gain in 2015 to date, rising 3.9% in US Dollar terms over the first quarter from New Year's Eve.
Platinum today traded 6.7% below its end-2014 level in Dollars, and palladium lost 9.0%.
"2015 is likely to mark the end of the bear cycle for gold," said Metals Focus director Nikos Kavalis today at the London launch event for the consultancy's new Gold Focus 2015, saying that demand to buy gold looks "broadly balanced" with those fundamental factors weighing against the metal.
Forecasting a Dollar gold price low of $1080 per ounce in the third quarter, with an annual high of $1270, "Perversely, we expect the announcement of US rate rises to be positive for gold prices," he told his audience in the City today.
Traders selling gold short in anticipation of the first rate hike "will unwind their positions," Kavalis said, and "longs may be tempted back in" as the realization grows that – thanks to the United States' huge household debt levels meaning increased servicing costs would badly hurt consumer spending – the Fed cannot raise rates very high.
Central-bank gold buying looks "quite supportive" Kavalis went on, while the outlook for supply is "relatively benign", with the decade-long rise in mining output now finished and scrap flows of second-hand metal depressed by lower prices.
Reviewing Metal Focus's 2014 data, "The biggest surprise is how modest the decline in Chinese demand was from 2013's record," Kavalis went on.
But household demand in India – traditionally the world's No.1 consumer market – was tempered by the 30% surge in Mumbai's stock market after May's victory by Narendra Modi's BJP, elected on a pro-business platform.
India's private demand to buy gold coins and investment bars fell 39% in 2014 according to data in Metal Focus's new 88-page yearbook, reaching the "lowest level since the start of the decade."
GOLD PRICES erased last week's gain versus the Dollar Monday morning in London, briefly trading below $1183 per ounce as the US currency extended its recovery from mid-March's drop.
Silver also erased last week's Dollar gain, falling almost 4% from Thursday's 1-month high to $16.75 per ounce.
Commodities cut earlier losses, but US crude oil held 7% beneath Thursday's sudden peak as world stock markets gained.
China's main stock index jumped 2.6% to hit fresh 7-year highs after central bank governor Zhou Xiaochuan said Beijing's bureaucrats "have room to act" on boosting growth, which has slowed "a bit" too much.
Less educated investors are piling into Chinese shares using margin accounts according to analysis gathered together by the Sober Look blog.
Major government bond prices also rose Monday, nudging 10-year US Treasury bond yields 1 basis-point lower to 1.95%, below the start of March's 2.03% and down from 2.17% at New Year.
Compared to gold's movement with the Euro or crude oil prices, "Gold's negative correlation with US Treasury yields is still the most dominant," says a technical analysis from Japanese trading house and London bullion market maker Mitsui Global Precious Metals.
"Yields look like being well supported around 1.80%," the note goes on, targeting 2.40% or above "if bond prices weaken on a succession of decent US data."
Wednesday this week brings the private-sector ADP estimate of US jobs hiring for March.
The Bureau of Labor Statistics then releases its estimate of US non-farm payrolls, the jobless rate, and average earnings on Friday – when London's bullion dealers, as well as European and US stock markets, will be closed for the long Easter weekend.
"The weekly candle is somewhat bearish," says a chart reading on gold prices from London market maker Scotia Mocatta – a division of Canada's ScotiaBank – pointing to last week's "sizeable upper shadow" above Friday's closing level.
Also "neutral" on gold prices overall, technical analysis from French investment and bullion bank Societe Generale says that "short term gold has achieved our earlier target of $1223 and is showing a retracement...likely to be confined to $1172."
Last Thursday's surge in gold prices near $1220 per ounce "was nothing more sinister than short covering," reckons brokerage Marex Spectron's London bullion head David Govett.
"Short holdings by [managed money] funds had risen to the highest figure since data began in 2006. Last week's [price] rise was in response to this...[and] was not the beginning of a sustained upward move."
Latest data from US regulator the CFTC show speculative traders growing their bearish 'short' betting against gold for the 7th week running in the week ending last Tuesday.
That growth came despite the previous week's sharp rise in gold prices, the fastest since late January, as the Dollar fell following a softer-than-expected view on raising interest rates from the US Federal Reserve.
Last week's total speculative short position reached "84% of the all-time high [and was] the most elevated since November," says Japanese conglomerate Mitsubishi's analyst Jonathan Butler, "suggesting there is still potential for a covering rally" if prices rise, forcing bearish traders to close their bets.