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Gold Drifts Lower as Investors Focus on US Jobs Data

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
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Gold Drifts Lower as Investors Focus on US Jobs Data

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk

Gold fell on Tuesday after rising 1% in the previous session as investors awaited US jobs data due later in the week for further clues on the health of the labor market and if it will deter the Federal Reserve from cutting rates in September.
Spot gold was down 0.5% at $2,335.97 per ounce, as of 0826 GMT. Prices touched their lowest level in nearly a month on Monday before settling 1% higher.
US gold futures were down 0.6% at $2,355.50.
ADP employment report is due on Wednesday before Friday's non-farm payrolls data, said Reuters.
"If the payrolls data comes above 200,000, which is kind of very rosy, then gold prices might slide further and even break that $2,320 support level," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
"We do see technical factors that are still positive at least in the near term because it's still being supported at the $2,320 support level, with yesterday's bounce reinforced by weaker-than-expected manufacturing numbers, which also caused the yields to fall."
Meanwhile, in major gold consumer India, share markets sold off sharply after early vote counting showed Prime Minister Narendra Modi's Bharatiya Janata Party (BJP)-led alliance was not headed for a landslide win as predicted.
"Just before the election results are out or during the election period, demand for gold will be subdued because of the restriction on cash transactions," said ANZ commodity strategist Soni Kumari.
"So once the election is over, we can expect some kind of pent-up demand because the wedding season is still not yet over," Kumari said, adding that if equities continue to crash, there will be some funds going into gold as well.
Among other precious metals, spot silver fell 2.5% to $30.01 per ounce, platinum was down 0.4% at $1,008.00 and palladium lost 0.3% to $915.00.
"The Modi government is focusing more on industrial growth like solar (projects). As industrial demand is improving, silver should benefit," said Ajay Kedia, director at Kedia Commodities, Mumbai.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.