Gold futures added to a modest rise Wednesday, after data showed a weaker-than-expected increase in the number of U.S. private-sector payrolls last month.
Gold for December delivery
The yellow metal added to early gains after payrolls-processing company ADP said private U.S. private sector payrolls rose by 330,000 in July. Economists surveyed by The Wall Street Journal had penciled in an increase of 653,000.
U.S. Treasury yields extended a decline after the data and the dollar weakened. The 10-year Treasury note yield
fell back below 1.15%, after finishing Tuesday at its lowest since February. The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was off 0.1%.
Gold “has rebounded after testing the $1,810 support level for the past two days and it looks poised to break resistance around $1830 next as it continues to make bullish price action on the intraday charts,” said Fawad Razaqzada, analyst at ThinkMarkets, in a note.
Lower bond yields are seen as a boon for gold, reducing the opportunity cost of holding the nonyielding metal. A weaker dollar can also be a plus, making commodities priced in greenbacks cheaper to users of other currencies.
The private-sector payrolls data, however, is often not a good guide to the U.S. Labor Department’s official monthly jobs report. The July labor report, due Friday, is expected to show the U.S. economy added 845,000 jobs last month.