Gold down 2% after ISM, ADP data, silver at lowest since 2010

Shutterstock photo - - Gold prices were sharply lower on Wednesday, following the release of mixed data on the U.S. labor market and services sector.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery fell by as much as 2.6% to a daily low of $1,137.30 a troy ounce earlier, a level not seen since April 2010.

Prices recovered to last trade at $1.142.70 an ounce during U.S. morning hours, down $25.00, or 2.14%.

Futures were likely to find support at $1,134.55, the low from April 23, 2010, and resistance at $1,175.00, the high from November 4.

Also on the Comex, silver futures for December delivery plunged 59.5 cents, or 3.73%, to trade at $15.35 a troy ounce. Prices hit $15.13 earlier, the lowest since February 2010.

The Institute of Supply Management said its U.S. non-manufacturing purchasing manager's index fell to 57.1 last month from a reading of 58.6 in September. Analysts had expected the index to inch down to 58.0 in October.

The disappointing data came after payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 230,000 last month, above expectations for an increase of 220,000.

While not viewed as a reliable guide for the government jobs report due on Friday, November 7, it does give guidance on private-sector hiring.

Meanwhile, the dollar marched higher against its major counterparts after the Republican Party won control of the Senate in the U.S. mid-term elections, raising hopes for an end to political deadlock in Washington.

The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.6% to hit a four-year peak of 87.69.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

The precious metals complex has been under heavy selling pressure in recent weeks amid speculation the Federal Reserve is moving closer to raising interest rates for the first time in eight years after ending its monthly bond-buying program, also known as quantitative easing, last month.

Gold, which yields nothing and costs money to hold, is seen as a less attractive investment during times of rising interest rates.

Elsewhere in metals trading, copper for December delivery lost 2.5 cents, or 0.84%, to trade at a two-week low of $2.993 a pound as growing concerns over the health of China's economy dampened the appeal of the metal.

Data released Wednesday showed that activity in China's service sector slowed to its lowest in three months in October, adding to signs of a slowdown in the world's second largest economy.

China's HSBC services index came in at 52.9, down from 53.5 in September and below forecasts of 53.9.

The Asian nation is the world's largest copper consumer, accounting for nearly 40% of global demand.

On Tuesday, the European Commission lowered its 2014 growth forecast for the euro zone to 0.8% this year, from 1.2% in the spring. It expects the economy to grow by 1.1% in 2015, down from 1.7% previously.

Copper is sensitive to the economic growth outlook because of its widespread uses across industries.

Europe as a region is third in global demand for the industrial metal. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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