Gold steadies as traders await jobs data for Fed cues

Bengaluru — Gold prices steadied on Wednesday as investors looked out for more US jobs data to gauge the Federal Reserve’s next steps on its monetary policy, though higher US bond yields kept a lid on bullion’s upside.

Spot gold was up 0.1% at $2,043.72/oz, at 0434 GMT, after hitting its lowest since December 21 on Wednesday. US gold futures rose 0.4% to $2,051.10/oz.

The biggest driver for gold prices for the last few days has been waning expectations of interest rate cuts in 2024 year and it would remain the case over the next few days, said Kyle Rodda, a financial market analyst at Capital.com.

Minutes of the December 12-13 Fed meeting released on Wednesday showed officials were convinced inflation was coming under control but also noted an elevated degree of uncertainty about the outlook on rate cuts.

Lower rates decrease the opportunity cost of holding non-yielding bullion.

Futures markets see a 72% chance that the Fed could begin cutting rates in March, compared with a 90% chance a week ago, according to CME’s FedWatch Tool.

The dollar index ticked lower but lingered near a three-week peak hit in the previous session, while yields on 10-year Treasury notes rose to 3.9330%.

US manufacturing contracted further in December, though the pace of decline slowed, while US job openings fell for the third straight month in November, pointing to easing labour market conditions.

Investors now await the weekly jobless claims data due at 1330 GMT and the non-farm payrolls report on Friday for further clarity on how much room the Fed has to lower rates.

Spot silver was steady at $22.97/oz, while platinum slipped 0.5% to $966.59. Palladium rose 0.1% to $1,066.93.

Reuters