London 04/04/2012 - Precious metals declined across the board in Wednesday afternoon trading after strong US jobs numbers further tempered expectations that the Federal Reserve will roll out a third round of quantitative easing (QE3) in the near term.
Spot gold dropped to a three-month low of $1,612.85 per ounce earlier, down $34.25 on yesterday’s close. It has since pared some of those losses and was last at $1,620.20-1,621.30.
On the charts, support is pegged at $1,608 before the psychologically important $1,600 level.
“Along with most other markets, gold and silver came under heavy selling pressure yesterday after the FOMC minutes appeared less dovish than market participants had hoped for,” broker Standard Chartered said.
The FOMC minutes reiterated that more monetary injection would only be needed if the US economy worsened. Only two out of the 10 voting members supported a third round of quantitative easing (QE3) to stimulate the US economy, which, they agreed, was moderately improving.
“It was largely the non-committal mentioning of further quantitative easing rather than a clear signal that there would be no further stimulus that markets have focused on,” Standard Chartered added.
Datawise, US ISM non-farm employment change was worse than the expected 56.9 at 56 although ADP non-farm employment change was positive at 209,000 against a forecast of 206,000.
EU retail sales were negative at -0.1 percent against forecast growth of 0.1 percent. Germany, the eurozone’s largest economy, also posted poor factory orders for February at 0.3 percent against an expected 1.2 percent.
In wider markets, the euro earlier fell to its lowest against the US dollar since March 16 to 1.3104 and was last hovering just above that level at 1.3126.
In eurozone news, the ECB held interest rates at record lows as expected, while its president, Mario Draghi, said it will monitor economic developments and that downside risks to the economic outlook prevail.
Today, for example, Madrid managed to sell just 2.59 billion euros of debt, far less than the maximum of 3.5 billion euros. The average yield on bonds maturing in 2020 also rose to around 5.34 percent from 5.16 percent at the previous auction, highlighting investor caution on the risk associated with buying Spanish bonds.
In Asia, India remains absent from the market - gold jewellers across the country decided to extend a strike in protest against higher gold import duties proposed by the government last month to a 19th day today. India’s finance minister will meet the heads of the e country’s jeweller associations on Friday.
"We suspect that the Indian strike situation will prove detrimental to the local physical market the longer it drags on, as a combination of reduced sales and falling gold prices will make it all more harder for demand to pick up where it left it," Ed Meir, analyst at Intl FCStone, said.
Other precious metals followed in gold’s footsteps - silver hit a low of $31.26 per ounce, platinum fell below the $1,600 mark to $1,593-1,602 and palladium fell to its lowest since January 16 at $633-637.
US car and light truck vehicle sales were at a seasonally adjusted annualized rate (SAAR) of 14.37 million in March, down 4.4 percent from the 15.03 rate last month and missing the forecast of a 14.7 million SAAR.
(Additional reporting by Clara Denina, Kathleen Retourne and Tom Jennemann, editing by Mark Shaw)
| TIME | |||||
|---|---|---|---|---|---|
| Sydney | Tokyo | Ha Noi | HongKong | LonDon | NewYork |
| Prices By NTGOLD | ||
|---|---|---|
| We Sell | We Buy | |
| 37.5g ABC Luong Bar | ||
| 4,528.90 | 4,198.90 | |
| 1oz ABC Bullion Cast Bar | ||
| 3,759.30 | 3,439.30 | |
| 100g ABC Bullion Bar | ||
| 11,989.90 | 11,059.90 | |
| 1kg ABC Bullion Silver | ||
| 1,480.30 | 1,130.30 | |
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