Gold edges higher after recent 10-week low

Bengaluru — Gold edged higher on Thursday, after touching a near 10-week low earlier in the session as the dollar firmed on US jobs data, while investors awaited clarity on US-China trade talks.

Spot gold edged 0.2% higher to $1,292.72 an ounce as of 7.06pm GMT. US gold futures settled little changed at $1,294.3.

“We bounced off a support level around the 100-day moving average, given the backdrop of weakening data for the most part and central banks on an easing path, markets were suddenly reluctant to keep selling gold below the $1,280 region,” said Ryan McKay, commodity strategist at TD Securities.

Gold had earlier touched its lowest since January 25 at $1,280.59 weighed down by a stronger dollar.

The dollar was up 0.2% against a basket of currencies as US jobless claims hit a 49-year low last week, pointing to sustained labour market strength despite slowing economic growth.  However, mixed data through the week from around the world did not assure market participants that all was well.

“Even though we had a favorable backdrop created by a more dovish US Federal Reserve, gold is following the dollar, real yields and equities very closely at the moment,” said Suki Cooper, precious metals analyst at Standard Chartered Bank. “But still, the broader backdrop is supportive for gold and we expect the dollar to weaken more in the second half of the year.” 

Analysts now await the closely watched US non-farm payrolls data on Friday for further clues on the strength of the US economy.

Investors are also watching developments in the US-China trade conflict, with US President Donald Trump expected to announce a date for a summit with China’s President Xi Jinping.

Holdings in the world’s largest gold-backed exchange-traded fund (ETF), SPDR Gold Trust, fell for a third straight session on Wednesday. Holdings were at their lowest since December 17 at 24.57-million ounces.

Among other precious metals, spot platinum was last up 2.6% at $897.25 an ounce, having earlier hit its highest since mid-June at $901.49 an ounce.

The automotive-catalyst metal jumped 3.4% in the previous session, the most in more than two years. Platinum is gaining because of a combination of momentum after breaking the recent highs as well as its relative value against gold and palladium, said Saxo Bank analyst Ole Hansen.

Palladium was down 2.8% at $1,365.01 and silver was little changed at $15.13.

Reuters