By Rachel Koning Beals
Gold could take a run at $1,400 later this year, says strategist
Gold futures on Wednesday retreated to a two-month low as a private-sector hiring snapshot was seen boosting the chance for an interest-rate hike from the Federal Reserve.
December gold GCZ6, -0.49% fell $2.20, or 0.2%, to $1,314.50 an ounce after trading a touch higher overnight. It closed Tuesday at $1,316.50 an ounce, the lowest settlement for a most-active contract since June 23, according to FactSet data.
The U.S. Dollar Index DXY, +0.14% a measure of the greenback against a basket of six rival currencies, was up 0.1% at 96.16.
The dollar rose and precious metals fell Tuesday and early Wednesday after Federal Reserve Vice Chairman Stanley Fischer reiterated that the central bank could raise interest rates more than once in the coming months, provided U.S. economic data remains solid.
Another largely upbeat report from the job front supported Fischer’s stance.
Private-sector hiring stayed strong in August as employers added 177,000 jobs, ADP reported. Economists polled by MarketWatch had expected an August gain of 175,000 jobs. ADP also revised July’s gain to 194,000 from the original estimate of 179,000.
“On balance, news flow supportive of the latest upshift in the priced-in Fed rate hike path that offers continued support to the US dollar seems likely to stoke selling pressure across much of the commodities space…” said Ilya Spivak, currency strategist with FXCM’s Daily FX. “Alternatively, outcomes casting doubt on the Fed’s ability to deliver tightening in the near term will probably prove supportive.”