Gold Holds Near Three-Month Low as Investors Weigh Rate Outlook

PT. Equityworld Futures - Gold held near the lowest in three months as the dollar extended gains on speculation the Federal Reserve will raise interest rates this year as the economy recovers.
Bullion for immediate delivery traded at $1,168.53 an ounce by 9:43 a.m. in Singapore from $1,167.21 on Monday, according to Bloomberg generic pricing. Gold fell to $1,163.84 on Friday, the lowest since Dec. 1, after a report showed the U.S. jobless rate fell to the lowest in almost seven years.
Investors are weighing data for clues on when the central bank may raise rates from near zero. The Bloomberg Dollar Spot Index is at the highest in a decade after the U.S. jobs report saw traders bolster bets on a September rate rise. Fed Bank of Dallas President Richard Fisher warned that delaying higher borrowing costs risked recession. Higher rates curb gold’s appeal as it generally gives returns only through price gains.
Gold for April delivery traded at $1,167.50 an ounce on the Comex in New York from $1,166.50 on Monday.
Silver for immediate delivery rose 0.2 percent to $15.8054 an ounce, after falling to $15.7222, the lowest since Jan. 5.
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ANZ: Gold could reach $US1100 in the next three months

PT. Equityworld Futures - The plunge in the gold price following strong US jobs data could be repeated over coming months, according to commodities analysts.
Gold fell 2.6 per cent from $US1200 an ounce on Friday after the release of US non-farm payrolls data on Friday night, and was hovering around $US1170 on Monday.
The data showed the United States added 295,000 jobs in February “ 55,000 more than economists were expecting. Furthermore, US unemployment dropped 0.2 of a percentage point to 5.5 per cent “ the lowest since May 2008.
"The non-farm payroll data has been a strong driver of the gold price over the last 18 months," said UBS commodities analyst Jo Battershill.
"Something that was never a big driver of gold has now become a very big driver of gold."
In addition, gold had breached an important technical level on Friday night's plunge, which had triggered further selling, he said.
"$US1185 over the past couple of years has been seen as a major sort of support level. There was a lot of influence around that level so that in a lot of markets there would have been a lot of triggers on that value. I would imagine a significant amount of value would have gone through once it breached that level."
Mr Battershill said the end of February through to July was traditionally a soft period for gold, which could see the price fall further.
"What's holding it up at the moment is that we're still seeing very, very strong physical demand out of China. The next four months will be a battle between [US interest rate rises] in the West and physical demand in the East.
"In the short term, you'd pick the interest rates on that."
However, in the longer term Mr Battershill predicted Asian demand would put a solid floor under the gold price.
"Every time we see gold touch new lows in this cycle you see strong physical demand out of China and India. Will there be a cultural shift away from gold as a store of wealth in the East? I don't think so."
Gold is now 38 per cent off its September 2011 high of $US1900, although higher than its November 2014 low of $US1144.
ANZ commodities analyst Daniel Hynes said gold could reach $US1100 in the next three months.
"It's come at a time when physical demand has been weak as well," he said. "The headwinds for gold have been quite strong over the past few weeks and that payrolls number was the straw that broke the camel's back.
"Our outlook for gold is fairly bearish at the moment . We'd be looking for prices to pressure the $US1100 level.
"Certainly in the very short term everything's going against it ... In the next few weeks or so there's going to be some serious headwinds which will put downward pressure on gold prices."
US interest rates and the US dollar were both rising, as were equity markets, he said.
"All that safe-haven buying support we saw at the start of the year has completely evaporated and is unlikely to return in the short term."
But Mr Hynes said the long-term view for gold was better, with ANZ forecasting $US1280 an ounce for the end of 2015.
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U.S. Stocks Drop as Feb Payrolls Report Fuels Rate Speculation

PT. Equityworld Futures - U.S. stocks fell, with benchmark indexes tumbling the most in two months, as better-than-forecast jobs data fueled speculation the Federal Reserve is moving closer to raising interest rates.

The Standard & Poor’s 500 Index fell 1.4 percent, the most since Jan. 5, to 2,071.26 at 4 p.m. in New York. The equity gauge lost 1.8 percent for the week.

Employers added more jobs than forecast in February and the unemployment rate dropped to 5.5 percent, the lowest in almost seven years, showing the labor market is sustaining progress after the best annual performance in 15 years.

The 295,000 advance in payrolls last month followed a 239,000 January increase that was smaller than previously reported, figures from the Labor Department showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 235,000 increase. The unemployment rate fell from 5.7 percent while hourly earnings rose less than forecast.

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Gold Erases 2015’s Advance on Concern U.S. Rates Will Rise Soon

PT. Equityworld Futures - The more the U.S. economy improves, the worse things get for gold bulls.

Bullion erased its 2015 gains and slumped the most in more than a year Friday after a government report showed American employers added more jobs than forecast in February. The unemployment rate dropped to the lowest in almost seven years. Holdings in exchange-traded funds backed by gold headed for the biggest weekly decline since November.

A stronger economy is fueling speculation that the Federal Reserve is getting closer to raising interest rates for the first time since 2006, damping the appeal of the metal, which generally offer returns through price gains. Futures fell 5.2 percent last month amid gains in U.S. equities and easing concern over Greece’s debt.

On the Comex, gold futures for April delivery fell 2.7 percent to settle at $1,164.30 an ounce at 1:41 p.m. in New York, the biggest drop since Dec. 19, 2013. Earlier, the metal slumped to $1,162.90, the lowest since Dec. 1.

Gold dropped 29 percent in the previous two years as the dollar surged and inflation remained low. Prices climbed 70 percent from December 2008 to June 2011 partly as the Fed held interest rates near a record low.

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