Gold futures settled higher on Wednesday, as bond yields dropped a bit. However, gains were just marginal as the dollar stayed firm against most of its rivals, extending gains from the previous session.
The dollar gained on its safe-haven appeal as global equity markets fell, with investors weighing the outlook for economic growth against the backdrop of soaring energy prices, debt crises of Chinese real estate majors, and the impasse in the U.S. Congress on raising the debt ceiling.
Treasury Secretary Janet Yellen has warned the U.S. could face a recession if Congress fails to raise the debt ceiling by October 18th.
Traders were also worried that inflationary pressures might prompt central banks to tighten policy sooner than expected.
The dollar index climbed to 94.45 in the European session, and despite subsequently coming off that high, was still firmly up at 94.26, gaining about 0.3% over its previous close.
Gold futures for December ended up by $0.90 at $1,761.80 an ounce, coming off the session’s low of $1,745.40 an ounce.
Silver futures for December closed lower by $0.076 at $22.532 an ounce, while Copper futures for December settled at $4.1475 per pound, down $0.0450 from the previous close.
A report from payroll processor ADP showed stronger than expected private sector job growth in the month of September. ADP said private sector employment jumped by 568,000 jobs in September after rising by a downwardly revised 340,000 jobs in August.
Economists had expected private sector employment to climb by 428,000 jobs compared to the addition of 374,000 jobs originally reported for the previous month.
Markets now look ahead to the Labor Department’s monthly employment report, which includes both public and private sector jobs. The data is due on Friday.
Economists currently expect employment to increase by 488,000 jobs in September after rising by 235,000 jobs in August. The unemployment rate is expected to dip to 5.1% from 5.2%.
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