NEW YORK: Gold prices were largely unchanged on Thursday, as rising US Treasury yields offset support from a weaker dollar, while markets awaited Friday’s US inflation data for clues on the Federal Reserve’s policy outlook ahead of its December meeting.
Spot gold was up 0.1percent to USD4,211.19 per ounce, as of 1611 GMT. US gold futures for February delivery rose 0.3percent at USD4,243.70 per ounce.
“Higher yields are keeping a bit of a cap on the upside (for gold), and providing some support is the general dollar index,” said Marex analyst Edward Meir. Benchmark 10-year US Treasury yields rose 1percent, while the US dollar index hit a one-month low, making gold more affordable for overseas buyers.
Data on Thursday showed new US unemployment benefit claims dropped to 191,000 last week, the lowest level in over three years and well below economists’ expectations of 220,000.
Meanwhile, Wednesday’s ADP report indicated US private payrolls declined by 32,000 in November, marking the steepest drop in more than two and a half years.
A majority of over 100 economists polled by Reuters forecast the Federal Reserve will reduce its key interest rate by 25 basis points at its December 9-10 policy meeting, as the central bank seeks to support a cooling labour market.
Lower interest rates typically benefit non-yielding assets like gold. Investors are now eyeing the September Personal Consumption Expenditures (PCE) report, the Federal Reserve’s preferred inflation gauge, due Friday.
“Markets aren’t going to do very much between now and next week and as far as gold is concerned, probably we will be stuck in a relatively uneventful trading range for a while,” said Meir, adding gold will not retest the old highs of nearly USD4,400 this year.
Meanwhile, silver fell 2.5percent to USD56.99 after touching a record high of USD58.98 on Wednesday. The metal is up about 97percent this year, supported by a structural supply deficit, concerns around market liquidity and its inclusion in the US critical minerals list. Platinum lost 1.1percent to USD1,652.17, while palladium slid 1.8 percent to USD1,433.50.
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