Gold set for first weekly fall in four; US jobs data in focus

Gold set for first weekly fall in four; US jobs data in focus

Representational image. Reuters

Gold was set to fall for the first time in four weeks on Friday, as diminished expectations of an early interest rate cut in the United States lifted the dollar and bond rates, while investors awaited a critical jobs data.

As of 0426 GMT, spot gold was up 0.1 per cent at $2,045.57 per ounce. So far this week, it has dropped roughly 0.8 per cent.

Gold futures in the United States climbed 0.1 per cent to $2,052.40.

“Gold is down this week as yields and the dollar rebound. That’s because markets have been scaling back Fed rate cut expectations since the start of the new year,” said Ilya Spivak, head of global macro at Tastylive.

The dollar index increased 0.1 per cent against its peers and was on track for its best week since July, making bullion more costly for holders of other currencies.

Meanwhile, benchmark US 10-year Treasury rates remained over 4 per cent and were on course for their strongest week since October.

Federal Reserve officials were confident that inflation was under control, but they expressed concern about the potential for rate cuts, according to minutes of the Fed’s December 12-13 meeting.

“The Fed has already signalled rate cuts this year, so now the question is of degree. Once the excesses of Nov-Dec are corrected, the overall trend this year still favors gold gains (for now),” added Spivak.

Lower rates decrease the opportunity cost of holding non-yielding bullion.

Market participants have tempered their expectations of monetary policy easing by the Fed, pricing in about a 65 per cent chance of a rate cut by March, compared with a 90 per cent chance a week ago, according to the CME FedWatch tool.

Investors now await the US non-farm payrolls report due at 1330 GMT for further direction on rate outlook.

Spot silver rose 0.5 per cent to $23.11 per ounce, while platinum slipped 0.7 per cent to $950.12.

Palladium rose 0.6 per cent to $1,042.68 after an eight-session slide.


Published on: January 05, 2024 11:59:37 IST

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