Gold prices dropped to over 2-week lows on Thursday as the dollar strengthened and the yield on U.S. bonds rose after data showed a drop in U.S. jobless claims, and a bigger than expected addition of jobs in the private sector.
The dollar index advanced to 90.55, gaining nearly 0.75%. The yield on U.S. 10-year Treasury Note climbed to over 1.6%.
Gold futures for August ended down by $36.60 or about 1.9% at $1,873.30 an ounce.
Silver futures for July ended lower by $0.727 at $27.477 an ounce, while Copper futures for July settled at $4.4630 per pound, down $0.1285 from the previous close.
A report released by payroll processor ADP showed private sector employment in the U.S. spiked by much more than expected in the month of May. ADP said private sector employment soared by 978,000 jobs in May after surging by a downwardly revised 654,000 jobs in April.
Economists had expected private sector employment to increase by 650,000 jobs compared to the addition of 742,000 jobs originally reported for the previous month.
According to data released by the Labor Department, initial jobless claims dipped to 385,000 in the week ended May 29th, a decrease of 20,000 from the previous week’s revised level of 405,000. Economists had expected jobless claims to edge down to 395,000 from the 406,000 originally reported for the previous week.
Meanwhile, the Institute for Supply Management released a report showing record growth in service sector activity in the month of May.
The ISM said its services PMI rose to 64.0 in May from 62.7 in April, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 63.0.
The Labor Department is scheduled to release the monthly jobs data on Friday. Economists currently expect the report to show employment jumped by 664,000 jobs in May after climbing by 266,000 jobs in April. The unemployment rate is also expected to dip to 5.9% from 6.1%.
The material has been provided by InstaForex Company – www.instaforex.com