Gold rally loses steam as dollar holds firm ahead of US jobs data

Gold prices edged lower on Tuesday, trading $100 below the record high level hit in the last session, as the dollar held firm and investors awaited more U.S. economic data this week that could influence the Federal Reserve’s rate outlook.

Spot gold was down 0.3% at $2,024.30 per ounce by 1200 GMT. Bullion had climbed to an all-time high of $2,135.40 on Monday, before dropping more than $100 in a single day to close 2% lower.

U.S. gold futures were steady at $2,042.70.

“Market participants are already expecting 120 bps of rate cuts (from the Fed) in 2024. So a repricing of those expectations could result in near-volatility, particularly if upcoming U.S. economic data comes in on the positive side,” said UBS analyst Giovanni Staunovo.

“That said, we expect market participants who missed out the gold rally would likely step in and buy gold on dips below $2,000/oz.”

The dollar extended gains on Tuesday against its rivals, making gold more expensive for other currency holders.
Meanwhile, traders lowered their Fed rate cut bets by March next year to about 60%, from 70% early on Monday, CME’s FedWatch Tool shows. The focus now shifts to the closely watched U.S. non-farm payrolls data on Friday. The monthly JOLTS report – which captures monthly hirings and firings – is due later on Tuesday and the private-sector ADP survey on Wednesday.

Lower interest rates reduce the opportunity cost of holding the non-interest-bearing bullion.

“Gold is quite overextended short-term, and so the current selloff we are seeing is not surprising,” Edward Meir, a metals analyst who provides research for Marex, said in a note.

“However, we think the complex could regroup if the dollar and rates resume their decline.”

Spot silver lost 1%, to $24.24 per ounce, platinum eased 1.4%, to $905.31 per ounce, while palladium slipped 1.6%, to $962.56 per ounce.

(What’s moving <a href=””>Sensex</a> and <a href=””>Nifty</a> Track <a href=””>latest market news</a>, <a href=””>stock tips</a> and <a href=””>expert advice</a> on <a href=””>ETMarkets</a>. Also, is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, <a href=”” rel=”nofollow” target=”_blank”>subscribe to our Telegram feeds</a>.) <p>Download <a href=”″ target=”_blank” rel=”nofollow”>The Economic Times News App</a> to get Daily Market Updates & Live Business News. </p> <p>Subscribe to <a href=””>The Economic Times Prime</a> and read the <a href=”,city-delhi.cms”>Economic Times ePaper</a> Online.</p> and <a href=””>Sensex Today Live</a>.</p> Top Trending Stocks: <a href=””>SBI Share Price</a>, <a href=””>Axis Bank Share Price</a>, <a href=””>HDFC Bank Share Price</a>, <a href=””>Infosys Share Price</a>, <a href=””>Wipro Share Price</a>, <a href=””>NTPC Share Price</a>

Articles You May Like

Yen Maintain Gains But Faces Momentum Hurdle, Dollar Indifferent to Weak Durable Goods
Gold rebounds as US dollar, yields slip with eyes on Fed guidance
Inflation remains sticky in Europe, with core prices cooling less than expected
Yen Rises on BoJ Rate Speculation, But Gains Muted
US Dollar flat in lackluster Tuesday

Leave a Reply

Your email address will not be published. Required fields are marked *