Gold finished firmly lower Wednesday, giving back roughly half of what it gained a day earlier, pressured by upbeat February data on U.S. private sector jobs as the dollar tried to rebound from a decline in the previous session.
Prices for the metal declined further in electronic trading after the release of the Fed Beige Book, which offered a snapshot of domestic economic activity. Among the findings of the report, which came out after gold futures settled, growth remained at a modest to moderate pace in January and February.
April gold GCJ8, -0.24% was at $1,325.50 an ounce in electronic trading. It had fallen $7.60, or 0.6%, to settle at $1,327.60 an ounce. Tuesday's finish at $1,335.20 an ounce was the highest since Feb. 16. The contract has been volatile in recent days considering that gold prices had closed at their lowest levels of the year just last Thursday.
Part of gold's about-face hinges on the dollar's moves. The ICE U.S. Dollar Index DXY, +0.15% was up less than 0.1% in Wednesday trading at 89.66, but off the overnight low of roughly 89.41. Commodities priced in dollars often trade inversely with the buck, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.
The dollar "should continue to be the primary influencer for gold prices," said Michael Armbruster, managing partner at Altavest. "Gold and dollar daily charts are nearly mirror images if you flip a dollar index chart upside down."
The greenback tumbled to 16-month lows against the Japanese yen USDJPY, +0.66% late last week when the first of this trade-related market churning underpinned a flight to the perceived safety for assets such as precious metals and the yen.
Prices for gold had climbed overnight, when the dollar tumbled on news of the resignation of key Trump adviser Gary Cohn, purportedly over the gully in their views on trade and tariffs.
Read more: How a tariff-rattled stock market is reacting to Cohn's resignation
"Cohn's resignation is a sign that President Trump is serious about imposing tariffs as a bargaining chip for better trade deals," said Armbruster. And "if the dollar behaves similarly as its reaction to Mr. Cohn's resignation, then the path of least resistance for gold appears to be higher."
Read: Trump, trade wars, inflation: Wall Street on edge ahead of February jobs report
Economic dataAmong U.S. economic data on Wednesday, the ADP employment report revealed that employers added a more-than-expected 235,000 jobs in February. Separate data showed that the trade deficit climbed 5% in January and hit a nearly 10-year high and U.S. productivity in the fourth quarter was revised to show no gain instead of a 0.1% decline.
The rise in the ADP jobs data "puts focus back on the number of rate increases in 2018," said Jeff Wright, chief investment officer at Wolfpack Capital. "We will have to see if this data is consistent with U.S. labor data later in the week to get a better sense."
Check out: MarketWatch's Economic Calendar
Other metalsMay silver SIK8, -0.30% fell 29 cents, or 1.7%, to $16.494 an ounce.
Read: Silver is poised to outpace gold this year
Among exchange-traded funds, the silver-focused exchange-traded iShares Silver Trust SLV, +0.13% fell 1.5% and the SPDR Gold Shares GLD, -0.24% edged down by 0.7%.
See: Gold ETFs see outflows in February amid price volatility
May copper HGK8, +0.18% ended at $3.136 a pound, down 0.7%. April platinum PLJ8, +0.23% fell 1.8% to $953.20 an ounce and June palladium PAM8, +0.56% fell 2% to $959.05 an ounce.