Gold rises as dollar and yields ease, with US nonfarm payrolls report in spotlight
- Spot gold rose 0.5% to $4,409.97 per ounce
Gold prices firmed as the dollar and Treasury yields eased, with investors awaiting US nonfarm payrolls data to gauge potential Federal Reserve rate hike impacts.
- US nonfarm payrolls data and its influence on Fed policy.
- The impact of easing US dollar and Treasury yields on gold.
- Market probabilities for a September interest rate hike.
Gold prices firmed on Thursday as the US dollar and Treasury yields eased, while investors strapped in for U.S. nonfarm payrolls data that could help shape expectations for the Federal Reserve’s next policy move.
Spot gold rose 0.5% to $4,409.97 per ounce by 0219 GMT after hitting a near one-month low in the previous session.
US gold futures gained 0.9% to $4,455.30.
The US dollar was under pressure while US Treasury yields slipped from multi-year highs. A softer dollar makes greenback-priced metals less expensive for holders of other currencies.
Key US nonfarm payrolls data is due on Friday.
Meanwhile, the ADP National Employment Report showed US private payrolls increased moderately in August.
“The payrolls report will probably be the biggest defining moment of the week. If the jobs report misses expectations, and September rate hike bets decline, that could see gold move higher,” said Ilya Spivak, head of global macro at Tastylive.
“If prices get over the $4,400 level they’re currently in, we are going back in the direction of $4,500 and then $4,700.”
Markets are currently pricing in a 62% probability of a U.S. rate hike this month, the CME FedWatch Tool showed.
U.S. economic activity increased modestly, employment rose slightly, and prices increased moderately in recent weeks, according to a mixed report published on Wednesday by the Fed that may do little to convince central bank policymakers one way or another as they weigh whether to raise interest rates at their September 15 to 16 meeting.
Gold is traditionally seen as an inflation hedge, but higher rates increase the opportunity cost of holding the non-yielding asset.
On the geopolitical front, top aides to US President Donald Trump are pushing to keep the Iran war from escalating before November’s midterm elections to staunch Republican electoral losses, four people familiar with the discussions said.
White House officials will consider ramping up military action after the November 3 vote, the sources said.
Among other metals, spot silver rose 0.6% to $65.74, platinum climbed 0.6% to $1,770.88 and palladium firmed 0.6% to $1,354.00.