Futures fell 1.7% on the rebound of the dollar and hopes of economic recovery.

Published: Sep 3, 2020 09:58

Source: Dow Jones

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SMM: COMEX futures fell 1.7% on Wednesday as the US dollar strengthened and a strong rebound in US manufacturing raised hopes of a rapid recovery in the US economy hit by the coronavirus.

Monthly gold futures in COMEX12, the most actively traded, fell $34.20, or 1.7%, to settle at $1944.70 an ounce at 13:30 new York time.

Other precious metals fell across the board, with December silver futures falling $1.250 to settle at $27.395 an ounce.

October platinum futures fell $48.60 to settle at $904.1 an ounce.

December palladium futures fell $43.60 to settle at $2267.5 an ounce.

In addition, COMEX12 copper for monthly delivery closed down 0. 8 cents at $3.0205 a pound.

"the main factor is the strength of the dollar, and gold is moving in the opposite direction to the dollar today," said EdwardMeir, an analyst at ED&FManCapitalMarkets. He added that good July factory order data in the United States also put pressure on gold prices.

The dollar rose 0.5 per cent, rebounding further from a more than two-year low hit in the last trading day.

Us factory orders rose more than expected in July, while US manufacturing data released on Tuesday showed that manufacturing activity accelerated to a nearly two-year high in August, fuelling optimism about a steady economic recovery.

On the other hand, private employment growth in the United States in August was lower than expected, indicating a slowdown in the recovery of the labor market.

"as far as the economy is concerned, there has been this small rebound in economic data, but there will not be any major changes in the long run," said PhillipStreible, chief market strategist at BlueLineFutures in Chicago.

Investors are watching the number of U.S. initial jobless claims released on Thursday and non-farm payrolls data released on Friday.

GeorgeGero, general manager of RBCWealthManagement, said in a report that gold prices should still be supported because buyers tend to buy bargains when gold prices fall sharply in a continuing epidemic and low interest rates.

Safe-haven gold has risen about 28% so far this year.

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