Gold hardly changed as traders await US nonfarm payrolls

Bengaluru — Gold prices were flat on Thursday as investors held back from making big bets ahead of a crucial US payrolls data later this week that could offer more clues on the Federal Reserve’s interest rate trajectory.

Spot gold held its ground at $2,025.69/oz by 5.16am GMT. US gold futures fell 0.3% to $2,042.50.

US data this week showed gradual signs of a cooling labour market in the US, with job openings falling to a two-and-a-half-year low in October, while private payrolls increased less than expected in November.

Investors’ focus now shifts to US nonfarm payrolls data on Friday ahead of the Fed’s updated economic and interest rate projections at their December 12-13 policy meeting.

“The expectation broadly will be for a lower nonfarm number so if it comes in at expectations or higher, you might expect a bit of a sell-off in gold,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.

Recent dovish comments from Fed officials and a slew of weaker-than-expected economic data raised expectations that the US interest rates have peaked and the Fed may begin to cut rates early in 2024.

Traders are pricing in about a 60% chance of a rate cut by March next year, CME’s FedWatch Tool shows.

“Weaker-than-expected economic data is bolstering expectations for early rate cuts by the US Federal Reserve … rate cuts later in the year [2024] should be supportive for gold investment demand,” ANZ analysts wrote in a note.

Lower interest rates tend to support non-interest-bearing bullion.

Spot gold looks neutral in a range of $2,019/oz-$2,033/oz, and an escape could suggest a direction, according to Reuters market analyst Wang Tao.

Spot silver fell 0.4% to $23.79/oz, platinum dropped 0.3% to $887.08 and palladium edged 0.3% lower to $940.68/oz.

Reuters