Gold Futures Pare Early Gains, Settle Lower As Dollar Rebounds

Gold futures failed to hold early gains and ended marginally down on Wednesday as the dollar rebounded from recent losses even as the latest batch of economic data raised expectations the Federal Reserve will likely soften its policy.

The dollar index, which fell after the release of the latest batch of economic data, recovered soon and climbed to 101.95, gaining about 0.35%.

Federal Reserve Bank of Cleveland President Loretta Mester said on Tuesday that policymakers should move their benchmark rate above 5% this year and hold it at restrictive levels for some time to quell inflation.

Gold futures for June ended lower by $2.60 or about 0.1% at $2,035.60 an ounce, coming off a high of $2,049.20 an ounce.

Silver futures for May ended down $0.064 at $25.037 an ounce, while Copper futures for May settled at $3.9865 per pound, gaining $0.0155.

In U.S. economic news, a report released by payroll processor ADP showed private sector employment rose by 145,000 jobs in March after climbing by an upwardly revised 261,000 jobs in February.

Economists had expected private sector employment to advance by 200,000 jobs compared to the addition of 242,000 jobs originally reported for the previous month.

A report released by the Institute for Supply Management showed growth in U.S. service sector activity slowed by much more than expected in the month of March.

The ISM said its services PMI slid to 51.2 in March from 55.1 in February. Economists had expected the index to show a much more modest decrease to 54.5.

Market participants now look ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.

Economists expect the report to show employment increased by 240,000 jobs in March after an increase of 311,000 jobs in February. The unemployment rate is expected to hold at 3.6%.

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