BENGALURU: Gold prices inched higher on Wednesday buoyed by lower bond yields, while investors waited for a crucial US employment report that could set the tone for Federal Reserve’s policy meeting next week.
Spot gold rose 0.2% to $2,023.62 per ounce by 1247 GMT. US gold futures gained 0.3% to $2,041.60. Helping bullion, benchmark 10-year Treasury yields hovered near a three-month low. “While gold may draw support from speculation around the Fed cutting rates, it may take a fresh fundamental spark to re-ignite the bullish rally. This could come in the form of the highly anticipated US jobs report on Friday,” said FXTM senior research analyst Lukman Otunuga.
“The nearest support can be found at the psychological $2,000 level while multiple resistances can be identified at $2,035, $2,050, and $2,100.” The November US non-farm payrolls data due on Friday, could provide clues on the interest rate path ahead of the US central bank’s policy meeting next week.
Bullion climbed to a record high of $2,135.40 on Monday on elevated bets for a Fed rate cut, before dropping more than $100 in the same session, due to uncertainty over the timing of the monetary policy easing. Traders are pricing in about a 60% chance of a rate cut by March next year, CME’s FedWatch Tool shows.
Lower US interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion. “The buying (in gold) should gradually resume and outlook continues to remain bullish,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
Comments
Comments are closed for this article.