JABAR EKSPRES – Gold prices slipped in late trade Wednesday (8/2), extending losses for a second straight day after Fitch Ratings downgraded the U.S. government’s credit rating, while the latest report showed the U.S. economy saw a strong gain in July private sector jobs.
The most active gold contract for December delivery on the Comex division of the New York Exchange slipped 3.80 US dollars or 0.19 percent to settle at 1,975.00 US dollars per ounce, after touching a session high of 1,992.20 US dollars and a session low of 1,969.10 US dollars.
Gold futures plunged US$30.40 or 1.5 percent to US$1,978.80 on Tuesday, after lifting US$9.30 or 0.5 percent to US$2,009.20 on Monday (7/31).
Gold prices pared early gains to end slightly lower on Wednesday (8/2), hurt by a stronger U.S. dollar and rising government bond yields as investors weighed Fitch Ratings’ decision to downgrade the U.S. credit rating to AA+ from AAA.
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The dollar index, a measure of the US currency against six major rivals, rose 0.57 percent to a fresh three-week high. The dollar index has gained 3.0 percent from a 15-month low on July 18.
The dollar rose on Wednesday (8/2) as investors shrugged off Fitch’s downgrade of the U.S. credit rating, while data showing a larger-than-expected increase in private payrolls in July supported the greenback as it pointed to labor market resilience.
Private payrolls rose by 324,000 jobs last month, the ADP National Employment report showed, more than the 189,000 increase forecast by economists.
“The dollar is likely to rise more in response to continued strong economic data and therefore the market thinks that the Fed will continue to raise interest rates,” said Michael Arone, Chief Investment Strategist of State Street Global Advisors in Boston.
Shortly after US markets closed on Tuesday (8/1), Fitch Ratings announced it had cut the US government’s credit rating, citing expected fiscal deterioration over the next few years and “erosion of governance” exemplified by the standoff over raising the debt ceiling in May.
