Gold prices on Wednesday climbed modestly higher after private-sector employment showed that the pace of hiring in the U.S. is slowing, reviving worries about a recession in the U.S. economy and spurring the purchase of assets perceived as havens.
Gold for December delivery GCZ19, +0.56% on Comex gained $9.40, or 0.6%, to reach $1,498.40 an ounce, after advancing 1.1% on Tuesday. The advance puts the yellow metal closer to a psychologically significant level at $1,500. Meanwhile, December silver SIZ19, +0.42% picked up 11 cents, or 0.7%, to $17.415 an ounce.
Automatic Data Processing Inc.’s private-sector employment showed that businesses added a modest 135,000 private-sector jobs in September. Economists polled by Econoday had forecast a gain of 152,000. The payroll processor also reduced its estimate of new jobs created in August to 157,000 from an original 195,000.
The lackluster report comes after the Institute for Supply Management’s survey on manufacturing registered at 47.8, down from 49.1 in July, below the 50.2 estimated by economists polled by MarketWatch, representing the worst reading since June 2009. Any reading below 50 indicates contraction.
Also published Tuesday, the JPMorgan IHS global manufacturing index for September remained below 50, the dividing line between expansion and contraction, for a fifth straight month.
The ADP labor data come ahead of a more closely watched Friday jobs report.
Gold prices have been on the decline as worries about global economic weakness has underpinned gains in the U.S. dollar, which has driven the ICE U.S. Dollar Index DXY, +0.09%, a measure of the buck against a half-dozen currencies, to hits highest level in about two years, at 99.21 as of Wednesday.
“Gold prices remain vulnerable following the break of the key $1,480 an ounce support level, but should see key support as we start to see a continued trend of soft US labor data points,” wrote Edward Moya, senior market analyst at brokerage Oanda, in a Wednesday note.
“The greatest safe-haven trade on earth is likely to regain its groove once we start to see further softness with US data,” he said.
Elsewhere on Comex, December copper HGZ19, +0.10% shed a penny, or 0.2%, to $2.55 a pound. January platinum PLF20, -0.12% shed 50 cents, or 0.1%, to $885.60 an ounce, while December palladium PAZ19, +0.70% gained $9.80, or 0.6%, to reach $1,640.50 an ounce.