Gold remains stable while traders await US job data

6 Dec 2023 , 09:43 AM

In advance of this week’s crucial U.S. jobs data, which could provide additional insight into the Federal Reserve’s rate strategy, gold prices remained stable on Wednesday as bets on a rate decrease by the Fed in the first half of 2024 levelled off against the dollar.

Spot gold was up 0.1% at $2,020.39 an ounce, moving within a narrow range of roughly $5.

February delivery U.S. gold futures increased by 0.1% to $2,038.70.

After Fed Chair Jerome Powell’s remarks last week, bullion had surged to a record high of $2,135.40 on Monday due to increased betting on a rate decrease. However, as the timing of the monetary policy easing became more ambiguous, bullion fell more than $100 in a single day.

While 10-year Treasury note yields increased slightly to 4.1858%, the dollar index declined by 0.1% vs a basket of currencies and remained close to a two-week high.

Gold priced in greenbacks becomes more costly for holders of other currencies due to a stronger dollar. October saw the lowest number of job opportunities in the United States in over 2.5 years, indicating that the need for labour was being tempered by rising rates.

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

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

Investors will be watching U.S. non-farm payroll statistics on Friday, which may provide additional insight into the future for interest rates.

The U.S. again put pressure on Israel to reduce the number of Palestinian civilian casualties as Israel’s military attacked the main city of southern Gaza in what it claimed to be the bloodiest fighting since it started its ground invasion to destroy Hamas five weeks ago.

Platinum increased by 0.2% to $900.57, while spot silver increased by 0.3% to $24.21 per ounce. Palladium increased 0.7%, trading at $940.93 an ounce, close to a five-year low.

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