Gold stagnant as investors await US jobs data

Gold prices traded in a tight range on Thursday as some investors stayed on the sidelines ahead of US jobs data that could influence the Federal Reserve’s monetary policy path.

Spot gold was little changed at $1,813.39 per ounce at 3.35am GMT, trading in a $5 range, after hitting its lowest since February 28 on Wednesday. US gold futures eased 0.1% to $1,816.70.

Gold is considered a hedge against inflation, and interest rate hikes to control rising prices make it less attractive. Rate hikes also dim non-yielding bullion’s appeal.

“The [gold] market has been muted … the market is still trying to digest where the Fed will go after Powell mentioned the final interest rates might be higher than initially expected,” said Brian Lan, MD at Singapore-based dealer GoldSilver Central.

Fed chair Powell on Wednesday reaffirmed his message of higher and potentially faster interest rate hikes, but emphasised that debate was still under way with a decision hinging on data to be issued before the US central bank’s policy meeting in two weeks.

After Powell’s remarks, markets are now pricing in a 50-basis-point (bps) hike at the Fed’s March 21-22 policy meeting.

“Gold traders are waiting for the non-farm payroll report on Friday before we see any major repositioning,” Edward Moya, senior market analyst at Oanda, said in a note.

The US jobs report is expected to show non-farm payrolls increased by 205,000 in February, according to economists polled by Reuters.

Private employment increased by 242,000 jobs last month, according to the ADP National Employment Report.

Other data on Wednesday showed US job openings fell less than expected in January, indicating persistently tight labour market conditions.

The dollar index firmed near a three-month high, making bullion less affordable for buyers holding other currencies.

Spot silver was flat at $20.00 per ounce, platinum edged 0.1% lower at $935.89 and palladium lost 0.5% to $1,366.76.