Weaker dollar nudges gold up with more seen after US jobs report

Bengaluru — Gold prices ticked higher on Thursday, aided by a softer dollar, while market participants braced for US jobs data that could influence the Federal Reserve’s (Fed) policy trajectory.

Spot gold was up 0.1% at $1,856.11/oz, as of 0302 GMT, after hitting a near seven-month high in the previous session. US gold futures also edged 0.1% higher at $1,861.20.

The dollar index eased 0.1%, making greenback-priced bullion more attractive for overseas investors.

“Gold has had a good start to the year, helped by a weaker dollar and expectations that the Fed might slow its pace of rate hikes. Recession risks and central bank buying should also support bullion this year,” said Brian Lan, MD at Singapore-based dealer GoldSilver Central.

“If the jobs data reflects that the rate hikes have taken a toll on the economy, then dollar might weaken further and benefit gold.”

The ADP National Employment Report is due at 1315 GMT. This will be followed by the US department of labour’s closely watched nonfarm payrolls (NFP) data on Friday.

Minutes of the Fed’s December policy meeting released on Wednesday showed that all officials agreed the US central bank should slow the pace of its aggressive interest rate hikes.

Meanwhile, Minneapolis Fed president Neel Kashkari said on Wednesday that the Fed should continue hiking interest rates at its next few meetings at a minimum until it is sure that inflation has peaked.

Bullion is seen as a hedge against inflation and economic uncertainties, but higher interest rates tend to weigh on nonyielding gold.

In other precious metals, spot silver was flat at$23.74/oz, while platinum gained 0.2% to $1,080.88 and palladium rose 0.3% to $1,793.38.

Reuters