London - Gold posted its first back-to-back decline in a week before a Bank of England decision on interest rates and official US jobs numbers that may set the tone for global monetary policy. Rising equities also cut demand for havens.
Bullion for immediate delivery fell 0.5 percent to $1 351.14 an ounce by 10:36 a.m. in London, according to Bloomberg generic pricing. It gained to $1 367.34 on Tuesday, the highest intraday level since July 11. In pounds, it held near a three-week high.
Gold has rallied 27 percent this year as the Federal Reserve held back on tightening in the US, and other central banks and governments pushed stimulus to boost growth. The Bank of England is set to cut rates to a record low later Thursday, according to almost all economists in a Bloomberg survey.
In the US, a report Wednesday by the ADP Research Institute showed companies added 179 000 jobs last month, above estimates, helping to boost the dollar and put pressure on gold. The Stoxx Europe 600 Index rose for a second day, curbing demand for havens such as gold.
“The stronger US ADP report has weighed on gold as hopes have risen for a strong report tomorrow,” Georgette Boele, a currency and commodity analyst at ABN Amro Bank NV, said by e-mail. “We expect the BoE to ease more than currently is anticipated, which could see the metal strengthen against the pound.”
On Wednesday, Fed Bank of Chicago President Charles Evans said a rate increase could be warranted this year as the economy picks up steam, even though he’s still worried that inflation is too low. Investors see only 20 percent odds of a hike in September, according to prices of federal funds futures.
In mining, Randgold Resources is fighting to meet its full-year production target after operational problems at two of its African mines led to lower gold output and profit.
The shares dropped as much as 12 percent, the most in four years. Second-quarter gold production slipped 6.2 percent as higher volumes at the flagship Loulo-Gounkoto mine was offset by declines at the Kibali mine and Tongon’s mill downtime, according to Bloomberg Intelligence analyst Eily Ong.
BLOOMBERG