Oct 6, 2017 | FMT News
NEW YORK: Gold was steady on Friday ahead of key US jobs data later in the day, with prices curbed as the dollar stood firm near a seven-week high.
Spot gold was little changed at US$1,267.95 an ounce at 0340 GMT. The metal was, however, down 0.9% for the week and headed for a fourth weekly decline.
US gold futures for December delivery were down 0.2% at US$1,270.60 per ounce.
“The dollar is strong. That is one reason why gold is rangebound. Markets are expected to hold this way until nonfarm payrolls is out. We might see some action only then,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
Asian shares rose on Friday, tracking Wall Street gains, and the dollar touched a seven-week high versus a basket of currencies on fresh signs of economic growth and hopes for progress on US tax reforms, with traders looking to US jobs data for near-term catalysts.
“The rebound of the dollar has been quite strong and may need to pause,” said Samson Li, an analyst with Thomson Reuters GFMS.
“Even if the dollar index may break over 94, further upside is probably limited, and a consolidation (softer dollar) will likely follow, before strengthening again towards the end of Nov/start of Dec when the market is expecting another rate hike.”
The US employment data for September is expected to show a slowdown due to the impact of Hurricane Harvey and Irma.
The long-term trend in annual US economic growth may be as low as 1.5%, San Francisco Fed President John Williams said on Thursday, a sombre view that implies perpetually low interest rates and a difficult hurdle for the Trump administration’s promised economic surge.
Markets are largely expecting the US Federal Reserve to raise interest rates again in December, for the third time this year.
The Fed will need to raise interest rates further to keep the economy on track to full employment and the central bank’s 2% inflation goal, Kansas City Fed President Esther George said on Thursday.
Gold is highly sensitive to rising rates, as these lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Spot gold may slide to US$1,260 per ounce as it has broken a support at US$1,270, according to Reuters technicals analyst Wang Tao.
In other precious metals, silver edged up 0.2% to $16.61 an ounce.
Platinum was unchanged at US$910.50 an ounce, while palladium slipped 0.2% at US$937.50 an ounce.
