Spot gold dropped 0.8% to $2,473.50 per ounce, having reached its lowest level since August 22
Gold prices extended declines to a two-week low on Wednesday as a sharp sell-off in equities forced a rush to cover margin calls, adding pressure on bullion ahead of non-farm payrolls data due later this week.
Spot gold dropped 0.8% to $2,473.50 per ounce as of 0928 GMT, having reached its lowest level since August 22. U.S. gold futures slipped 0.7% to $2,505.40.
Gold is under some light pressure this morning in the face of equities’ weakness– this is normal as there may be some selling in case of equity-related margin calls, according to StoneX analyst Rhona O’Connell.
Other precious metals are down, partly in sympathy, but more likely in response to those dire figures from the U.S. yesterday, O’Connell said.
U.S. manufacturing declined at a moderate pace in August amid some improvement in employment, but a further drop in new orders and rise in inventory indicated factory activity could remain subdued.
Shares across the world dropped on Wednesday, hit by a decline in tech stocks after a record sell-off for U.S. chipmaker Nvidia and as expectations of fading global growth hit riskier assets.
Gold remains under pressure despite the risk-off mood. The precious metal could be exposed to further volatility on Wednesday due to the incoming U.S. factory orders, JOLTS labour market data which may influence Fed cut expectations, according to FXTM senior research analyst Lukman Otunuga.
The major risk event this week is Friday’s U.S. jobs data. Given how investors may use this as a guide to how quickly or slowly the Federal Reserve will cut rates from September onwards, this data could rock gold prices, Otunuga said.
