Gold falls as dollar steadies ahead of US labour data

Gold falls as dollar steadies ahead of US labour data

Mubasher: Gold prices dipped on Thursday in range-bound trading as traders booked profits and the US dollar strengthened.

By 8:53 am GMT, US gold futures went down 0.03% to $1,242.20 per ounce, while spot gold fell 0.22% to $1,237.74 per ounce.

“Gold has been near key levels of $1,240, so there might be some technical-level profit-taking,” India-based Hareesh V, Geojit Financial Services commodity research head told Thomson Reuters.

Investors await the scheduled meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, as well as US nonfarm employment change data due on Friday, he said.

“Investors are seen adopting a cautious stance ahead of the US jobs report which could offer insight over the health of the US labour force,” FXTM research analyst Lukman Otunuga told the news agency.

US Federal Reserve policymakers are meeting on 18 and 19 December, amid widespread expectations that the central bank would raise interest rates.

“Although a rate hike is already priced in, markets will be closely watching the meeting for clues on rate-hike timings in 2019,” Otunuga said, adding that “if the meeting echoes a similar message to [Chairman Jerome] Powell’s dovish shift, gold has the potential to shine into 2019.”

The US dollar remained firm as rising risk aversion weighed on equities and US Treasury yields.

By 8:49 am GMT, the US dollar index, a tracker of the greenback against a basket of six major peers, ticked down 0.02% to 97.0540.

The gap between the two-year Treasury yields and their five-year counterparts inverted this week, while the spread between the two-year and 10-year was at its flattest in more than a decade.

“A yield curve inversion indicates higher borrowing cost in short term, so for safe-haven assets in the longer run it’s going to be very positive,” Singapore-based Phillip Futures commodities analyst Benjamin Lu told Reuters.