Gold prices remained steady and hovered around $1,400 an ounce mark on Wednesday as concerns over early winding down of the multi-billion bond purchase program from the Federal Reserve eased following tepid job data. Silver prices, meanwhile, edged higher in trading on Wednesday.
U.S. gold futures for August delivery added $1.30 to settle at $1,398.50 an ounce at the COMEX division of the New York Mercantile Exchange while spot gold was last up 0.04% to $1,399.50 an ounce.
The Federal Reserve’s monthly $85 billion worth bond purchase program, also referred to as the quantitative easing, has been explicitly tied to an improvement in the labor market. Earlier today, a data provided by Moody’s Analytics and Automatic Data Processing (ADP) showed that the U.S. private sector added just 135,000 new jobs in May, well short of economists’ consensus estimate for 160,000 new job creations. The weakness in job numbers has reignited hopes that the Fed would keep its economic stimulating efforts intact, for the time being.
Quantitative easing, which entails excessive currency printing, stokes inflationary concerns in the long run which in turn boosts the demand for inflation-hedge assets such as gold.
Another economic indicator, which market participants will closely watch out for is the Labor Department’s monthly non-farm payrolls data for May. In case, the numbers show any weakness then it will be almost certain that the Fed will not hurry to scale down its ongoing quantitative easing. The data is due on Friday. According to Reuters, economists are expecting only modest recovery in the job market.
Silver futures were last up 0.41% to $22.50 an ounce.
In late trading, the iShares Silver Trust (ETF) (NYSE: SLV
) was up 0.05%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ
) was up 0.09%.