MW: Gold dips, dollar gains as markets pause after two-day rally
By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- A two-day rally in gold and metals futures took a breather on Wednesday, as traders digested a small drop in U.S. private-sector jobs in January, which joined a raft of recently upbeat economic news and lifted the dollar.
Stocks were also under pressure after their recent rally, following mixed earnings reports. Futures for the Dow Jones Industrial Average (INDU 10,295, -1.89, -0.02%) were recently down 12 points.
Gold for April delivery fell $3.80, or 0.3%, to $1,118 an ounce in electronic trade.
On Tuesday, gold futures gained 1.2% after upbeat reports from the U.S. housing sector. On Monday, the precious metal rose more than 2% following strong manufacturing reports from the U.S., Europe and China.
Dollar gains added pressure to gold futures early Wednesday. A stronger U.S. currency pressures commodities as it makes them more expensive to holders of other currencies. It also reduces gold's appeal as a hedge against currencies.
The dollar advanced Wednesday after news that U.S. private-sector firms eliminated 22,000 jobs in January. It was the smallest monthly decline in jobs since January 2008. The ADP jobs data come two days before the Bureau of Labor Statistics releases its estimate of January nonfarm payrolls.
The dollar index (DXY 79.15, +0.14, +0.18%) , which measures the U.S. unit against six major counterparts, recently rose 0.2% to 79.13.
