Gold little changed ahead of U.S. jobs data

Gold and silver bars are seen at the Kazakhstan's National Bank vault in Almaty
Gold and silver bars are seen at the Kazakhstan’s National Bank vault in Almaty, Kazakhstan, September 30, 2016. REUTERS/Mariya Gordeyeva/File Photo

By Apeksha Nair

(Reuters) – Gold was mostly unchanged early on Thursday as the dollar held firm on strong U.S. services sector growth, with markets awaiting the key U.S. non-farm payrolls report on Friday.

Spot gold was steady at $1,274.50 an ounce at 0407 GMT.

U.S. gold futures for December delivery were unchanged at $1,277 per ounce.

“Everyone’s waiting for the employment figures this Friday. Unless somebody in the Federal Reserve says something, there’s not going to be much movement until Friday,” said Yuichi Ikemizu, Tokyo branch manager at CIBC Standard Bank.

On Thursday, the dollar inched up against a basket of its peers, after data from Wednesday showed growth in the U.S. services sector accelerated in September to its fastest pace in 12 years, although sagging Treasury yields limited gains.

Markets awaited U.S. non-farm payrolls data on Friday, with investors expecting a slowdown in new jobs due to disruptions from two major hurricanes in September.

Asian shares were a tad firmer in early trade, taking their cues from strong U.S. data although holiday-thinned trade and uncertainty about the impact of recent hurricanes on the U.S. economy were likely to keep investors cautious.

“Recently, China has been quiet even when they were in. Things might change because this week gold is a bit lower than last week. They may show some interest,” Ikemizu said.

“The North Korea news has died down but it could come back at any time. I would be pretty cautious to go short from here. I’d rather think people will be bargain hunters below $1,300.”

Spot gold may retest resistance at $1,281. If it breaks through that level prices could climb into the $1,287-$1,297 per ounce zone, Reuters technicals analyst Wang Tao said.

Meanwhile, Fed funds futures on Wednesday showed investors were pricing in an 83 percent chance of a December rate hike by the U.S. central bank.

Higher interest rates typically boost the dollar and aid bond yields, adding pressure on greenback-denominated, non-yielding gold.

Any new head of the Fed will need to have the “flexibility of mind” to change tack during acute periods of crisis, the U.S. central bank’s outgoing Vice-Chairman Stanley Fischer said on Wednesday.

In other precious metals, silver was flat at $16.58 an ounce.

Platinum slipped 0.3 percent to $909.35 an ounce, while palladium edged 0.2 percent higher to $924 an ounce.

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