Stronger U.S. jobs data pressure gold, silver

Gold and silver prices are lower in midday U.S. trading Thursday, following a much stronger-than-expected U.S. ADP employment report this morning that showed a gain in jobs that was double market expectations. The report pushed the U.S. dollar index well off its overnight low and also pushed U.S. Treasury yields higher. August gold was last down $10.50 at $1,916.70 and September silver was down $0.497 at $22.905.

The June U.S. ADP report showed a rise of 497,000 jobs, compared to market expectations for a gain of 220,000. That data falls into the camp of the U.S. monetary policy hawks, who want to see the Federal Reserve continue to raise interest rates. Now comes the U.S. employment situation report from the Labor Department Friday morning. The key non-farm payrolls number was forecast up 240,000 versus a gain of 339,000 in the May report. However, today''s strong ADP jobs number has many thinking Friday''s Labor Department jobs report will also be stronger.

The latest FOMC minutes from the Federal Reserve were released Wednesday afternoon and they also leaned hawkish. The minutes from the June 13-14 meeting showed that while almost all Fed officials deemed it "appropriate and acceptable" to keep the key Fed funds rate unchanged at a 5.0-5.25% range, some would have supported a 0.25% increase, according to a Bloomberg report. The minutes also said "almost all" FOMC members agreed that further tightening of U.S. monetary policy will be needed this year. The gold and silver markets did not react strongly to the minutes.