Gold slips as caution sets in before key U.S. jobs data
Gold prices slipped on Thursday from a near seven-month peak, as the dollar steadied and investors squared positions ahead of the closely watched U.S. jobs data that could influence the Federal Reserve’s rate-hike path.
Spot gold was down 0.3% at $1,848.59 per ounce, as of 0924 GMT, after hitting its highest since June 13 in the previous session. U.S. gold futures fell 0.3% to $1,854.10.
Minutes from the Fed’s Dec. 13-14 policy meeting released overnight showed policymakers still focused on controlling the pace of price increases that threatened to run hotter than anticipated.
“The minutes did not really give us anything new to act upon,” said Ole Hansen, head of commodity strategy at Saxo Bank, adding that the market was trying to work out the reason behind the initial moves in gold at the start of the year.
“Conviction among traders tends to be a bit low at this time of the year,” Hansen said, adding that the metal was seeing some profit-taking after it reached $1,865 levels.
The dollar index rose 0.1%, putting pressure on gold. A stronger dollar makes gold more expensive for buyers holding other currencies.
Market focus now turns to the ADP National Employment Report due at 1315 GMT, followed by the U.S. Labor Department’s nonfarm payrolls (NFP) data on Friday.
“If the jobs data reflects that the rate hikes have taken a toll on the economy, then the dollar might weaken further and benefit gold,” said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
Minneapolis Fed President Neel Kashkari said on Wednesday that the Fed should continue hiking rates at its next few meetings at a minimum until it is sure that inflation has peaked.
While bullion is seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding asset.
Spot silver dipped 1.1% to $23.49 per ounce, platinum rose 0.1% to $1,077.62 and palladium climbed 0.4% to $1,795.88. (Reporting by Arundhati Sarkar and Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu)
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