Gold prices stabilise as rate-cutting bets are fueled by US jobs data

7 Dec 2023 , 10:11 AM

In addition to traders anticipating the release of a significant jobs report later in the day that may provide guidance on the Federal Reserve’s future course, gold prices increased on Thursday as indications of a cooling U.S. labour market bolstered chances of an interest rate drop early in 2019.

Spot gold was up 0.1% at $2,027.12 an ounce. The price of US gold futures dropped 0.2% to $2,044.10.

Against a basket of currencies, the dollar index fell by 0.1%, lowering the price of gold for holders of other currencies.

Ten-year Treasury note yields were almost unchanged from a three-month low.

October saw a 2-1/2-year low for job opportunities in the United States, and last month’s less-than-expected increase in private payrolls in the country indicated a slowdown in the labour market.

Additional statistics released on Wednesday revealed that, despite strong worker productivity, U.S. unit labour expenses in the third quarter were far lower than first believed.

Non-interest bearing bullion is typically supported by lower interest rates.

Ahead of the Fed’s revised economic and interest rate estimates at their policy meeting on December 12–13, investors are currently awaiting important U.S. non-farm payrolls data on Friday, which could help further measure the rate outlook.

According to CME’s FedWatch Tool, traders are factoring in a 60% possibility of a rate reduction by March of the next year.

On Wednesday, the Bank of Canada maintained its benchmark overnight rate at 5% while expressing openness to a potential raise.

Spot silver decreased 0.4% to $23.79 per ounce, while palladium marginally decreased 0.1% to $942.40 per ounce and platinum lost 0.3% to $887.40.

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