Gold Prices Decline on Upbeat ADP Report, Oil Falls on U.S. Inventory Increase

Gold prices were lower in North America on Wednesday, falling to its lowest level since February, after an upbeat ADP report. The U.S. added jobs at a faster pace than expected in February.

Gold Prices

Gold futures tumbled to a low of $1,208.50 per troy ounce before settling at $1,209.65.

Spot gold fell $6 to $1,209.90 per ounce.

ADP, the payroll processing firm, reported that nonfarm private employment increased by 298,000 last month, far surpassing forecasts of a 190,000 increase.

The report from ADP may prompt economists to adjust their forecasts for Friday’s nonfarm payrolls figure.

The positive report from ADP fueled expectations that the Federal Reserve will increase rates at its next monetary policy meeting next week.

The U.S. dollar index was up 0.3% to 102.09 in morning North American trade.

Gold prices are sensitive to U.S. interest rates, as investors flock to higher-yielding assets.

Silver futures for May slipped 15.9 cents, or 0.9%, to $1,737 per ounce. Platinum fell 0.4% to $957.70.

Palladium slipped 0.8% to $768.75.

Copper Gains

 

Copper futures, meanwhile, gained 1.1 cents, or 0.4%, to $2.630 per pound.

Crude Lower

 

Meanwhile, oil fell below $56 per barrel on Wednesday after a report from API (American Petroleum Institute) showed an increase in U.S. stockpiles. The report renewed fears that growing stockpiles in the U.S. will undermine OPEC’s efforts to curb output.

According to API, U.S. crude inventories increased by 11.6 million barrels, more than forecasted. The government’s supply report is due later today.

U.S. crude dipped 57 cents to $52.57. Brent crude fell 54 cents to $55.38 per barrel.

If the U.S. Energy Information Administration (EIA) confirms an increase in crude stockpiles, it will mark the ninth straight week of increases. Analysts forecasted an increase of 1.9 million barrels.

The EIA expects U.S. crude production to increase by 330,000 barrels per day in 2017 to 9.21 million barrels per day.