An employee puts gold bullions into a safe deposit box at Degussa shop in Singapore
Edgar Su | Reuters
Gold prices were flat on Thursday as investors held back from making big bets ahead of a crucial U.S. payrolls data later this week that could offer more clues on the Federal Reserve’s interest rate trajectory.
Spot gold held its ground at $2,025.69 per ounce by 0516 GMT. U.S. gold futures fell 0.3% to $2,042.50.
U.S. data this week showed gradual signs of a cooling labor market in the United States, with job openings falling to a 2-1/2-year low in October, while private payrolls increased less than expected last month.
Investors’ focus now shifts to U.S. non-farm payrolls data on Friday ahead of the Fed’s updated economic and interest rate projections at their Dec. 12 to 13 policy meeting.
“The expectation broadly will be for a lower non-farm number so if it comes in at expectations or higher, you might expect a bit of a sell-off in gold,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
Recent dovish comments from Fed officials and a slew of weaker-than-expected economic data raised expectations that the U.S. interest rates have peaked and the Fed may begin to cut rates early next year.
Traders are pricing in about a 60% chance of a rate cut by March next year, CME’s FedWatch Tool shows.
“Weaker-than-expected economic data are bolstering expectations for early rate cuts by the U.S. Federal Reserve … rate cuts later in the year (2024) should be supportive for gold investment demand,” ANZ analysts wrote in a note.
Lower interest rates tend to support non-interest-bearing bullion.
Spot gold looks neutral in a range of $2,019 to $2,033 per ounce, and an escape could suggest a direction, according to Reuters market analyst Wang Tao.
Spot silver fell 0.4% to $23.79 per ounce, platinum dropped 0.3% to $887.08 and palladium edged 0.3% lower to $940.68 per ounce.
