Monday, March 4

Gold flat as dollar, yields gain ahead of US jobs data

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Gold prices were little changed on Thursday, with gains curbed by an uptick in the dollar and US Treasury yields while investors held back from making large bets ahead of US jobs data.

Spot gold was steady at $1,716 per ounce, as of 0917 GMT. US gold futures edged 0.2% higher to $1,723.70.

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The dollar index rose 0.3% against its rivals, making gold more expensive for other currency holders. Benchmark US 10-year Treasury yields also crept higher.

“Markets are now in wait-and-see mood as investors are waiting for US data related to the labor (market),” said Carlo Alberto De Casa, external analyst for Kinesis Money.

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“Any good data is a bad news for the market right now. So basically, if the data is above expectation this would mean that the Fed is going to accelerate with more rate hikes, which is negative for gold.”

The US Labor Department’s nonfarm payrolls data for September on Friday would follow a better-than-expected ADP National Employment report on Wednesday.

The Institute for Supply Management’s non-manufacturing PMI reading also came in slightly above expectations, suggesting underlying strength in the economy despite rising interest rates.

Upbeat data and hawkish comments from San Francisco Federal Reserve President Mary Daly on Wednesday cooled any hopes of a policy pivot.

Gold is highly sensitive to rising interest rates, as these increase the opportunity cost of holding non-yielding bullion.

“Gold needs to see a sharper slowdown in the US and cooler prices for a bullish breakout to form,” Edward Moya, senior analyst with OANDA said in a note.

“Gold seems poised to consolidate between $1,680 and $1,740 until we get both the NFP report and latest inflation readings.”

Elsewhere, silver fell 1% to $20.49 per ounce, platinum rose 0.3% to $921.57 and palladium gained 0.8% to $2,264.54. (Reporting by Brijesh Patel in Bengaluru; editing by Uttaresh.V)