El Salvador lawmakers overturn mining ban Bukele called absurd
El Salvador became the first country in the world to ban all forms of metals mining in 2017.
Gold retreated on Wednesday after a two-day surge as traders weighed whether the Federal Reserve may moderate its hawkish stance after the release of weak US data.
Spot gold slid nearly 1.0% to $1,709.82 per ounce by 10:45 a.m. ET, erasing most of its gains from the previous session. US gold futures also fell 1.0% to $1,714.30 per ounce.
[Click here for an interactive chart of gold prices]
Meanwhile, both the US dollar and Treasury yields rebounded, lessening the appeal of the precious metal, which has risen by 4% over the past two days.
“We’re seeing a resurgence in the dollar and yields, as a result, we’ve seen a pullback in gold after a pretty aggressive move higher over the course of the last several sessions,” David Meger, director of metals trading at High Ridge Futures, told Reuters.
A worse-than-expected US manufacturing gauge and a decline in US job openings had helped push bullion up through the key $1,700 price level, marking a shift in market sentiment.
Recent data showed US private employers stepped up hiring in September, suggesting demand for workers remains strong despite rising interest rates and tighter financial conditions.
The focus now shifts to the US Labor Department’s closely watched nonfarm payrolls data on Friday, as well as reactions from Fed officials to the data.
“The fact that the US dollar should ease during the course of next year points to a higher gold price again,” Commerzbank AG analysts including Thu Lan Nguyen said in a Bloomberg note. “This is because the Fed is unlikely to raise its interest rates any further after the first quarter of 2023.”
(With files from Bloomberg and Reuters)
