Gold rally eases slightly as dollar ticks up

Gold prices eased slightly on Thursday as the dollar edged up and markets hunkered down for cues from the US jobs report.

Spot gold fell 0.1% to $2,018.99 per ounce by 1041 GMT but is still up 2.6% so far this week on economic slowdown concerns. US gold futures remained unchanged at $2,035.70.

The surprise oil output cuts by Opec+ and weak US economic data over the week stoked fears of a potential recession in the United States, sending gold up above $2,000.

With the market being over-stretched, some profit-booking, and an uptick in the dollar, there’s a cool-off in the prices, said Vandana Bharti, assistant vice-president of commodity research at SMC Global Securities.

While there could be further short-term corrections, gold could bounce again on continuous weaker indicators amid steady central bank buying, Bharti added.

The dollar index edged 0.1% higher, making bullion expensive for overseas buyers.

Investors now await Friday’s US non-farm payrolls report for March. However, market reactions can be gauged only by Monday as most financial markets will remain shut for the Good Friday holiday.

Gold is traditionally considered a hedge against inflation and economic uncertainties, but higher interest rates dim the non-yielding bullion’s appeal.

While Cleveland Federal Reserve Bank president Loretta Mester said interest rates would need to still be over 5%, markets see a 56% chance of the Fed standing pat on rates in the May policy meeting, according to CME’s FedWatch tool.

Meanwhile, physical gold demand in key Asian hubs hit a pause this week with high domestic prices forcing dealers in some markets to lure customers with discounts.

Spot silver fell 0.1% to $24.95 per ounce, platinum gained 0.7% to $1,004.42, while palladium edged 0.4% higher to $1,435.56.

Reuters