Friday, October 3, 2014


Gold has posted slight losses on Friday, as the spot price stands at $1207.10 per ounce late in the European session. On Thursday, the ECB left interest rates unchanged but said that it would begin purchasing asset-based securities (ABS) in the fourth quarter of 2014. Over in the US, todays highlight is the Nonfarm Payrolls, which should be considered a market-mover. As well, the US will release the unemployment rate, Trade Balance and the ISM Non-Manufacturing PMI. Recent sharp gains by the US dollar are weighing on gold prices, as a stronger dollar diminishes the metal’s appeal as an alternative asset to the dollar. The dollar enjoyed a spectacular September, as gold prices have tumbled over 6% during this period. With the Fed scheduled to wind up QE and attention shifting to the timing of an interest rate hike, gold could continue to move lower.
It has been a week to forget for the pound, as GBP/USD has shed over 200 points. Early in the European session, the pair is trading at the 1.60 line, its lowest level in three weeks. On the release front, UK Services PMI dropped to 58.7 points. In the US, Nonfarm Employment Change and the unemployment rate sparkled and the pound has dropped sharply in response.
British Services PMI softened in September. The index dropped to 58.7 points, down from 60.5 points a month earlier. The estimate stood at 59.1. Earlier in the week, Construction PMI improved to 64.2 points last month, beating the estimate of 63.7 points. This marked a fourth straight increase and the indicators highest level in 8 months. However, Manufacturing PMI disappointed at 51.6 points, its lowest level in 16 months.