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What Made Gold Decline on Wednesday, August 3?

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Aug. 3 2016, Published 4:55 p.m. ET

Gold and silver declined on August 3

Gold and silver started the day with decreased momentum and maintained losses throughout the day on Wednesday, August 3. At 2:30 PM EDT on August 3, the COMEX gold futures contract for December delivery was trading at $1,364.15 per ounce, a drop of ~0.62%.

At the same time, the COMEX silver futures contract for September delivery was trading at ~$20.46, a decline of ~1.2%. Please read Copper, Gold, and Silver Are Weaker Early on August 3 to see how metals traded in the early morning hours on August 3. The better-than-expected US economic data, along with the stronger dollar, is weighing on precious metal prices on August 3.

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Gold weakened by better-than-expected US economic data

The sentiment in the gold market was weakened on August 3 due to the release of ADP Non-farm Employment Change data and ISM Non-Manufacturing PMI data. According to the ADP Non-Farm Employment Change data released by Automatic Data Processing (ADP) at 8:15 AM on August 3, the US economy added 179,000 jobs in July.

This is better than the Market’s expectation of an increase of 170,000 jobs. This better-than-expected data gave support to the US dollar and weakened gold prices.

In addition to the ADP non-farm employment data, the ISM services PMI also supported the dollar’s recovery. According to the data released by the Institute of Supply Management, the services PMI for July came in at 55.5, which is less than the Market’s expectation of 56. However, the strong growth supported the US dollar.

The market is looking forward to the jobs report from the US Department of Labor, which is scheduled to be released on Friday, August 5. At 2:45 PM EDT on August 3, the precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) declined by ~1.6%, ~2.3%, ~0.68%, and ~0.22%, respectively. The SPDR Gold Trust ETF (GLD) fell by ~0.49%.

In the final article in this series, we’ll look at how the metals and mining sector performed on August 3.

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