Gold prices dipped on Thursday, pressured by strength in the dollar and Treasury yields, while investors prepared for U.S. jobs data that could influence the Federal Reserve’s monetary policy trajectory.
Spot gold fell 0.1% to $1,714.29 per ounce. U.S. gold futures settled flat at $1,720.8.
The dollar index rose about 1%, making greenback-priced gold more expensive for other currency holders. Benchmark U.S. 10-year Treasury yields also firmed.
“We’re essentially just holding as we have a big jobs report tomorrow and then some inflation data next week … those would be two major data points to determine the next leg here for gold, looking forward to the next Fed meeting,” said Ryan McKay, commodity strategist at TD Securities.
The U.S. Labor Department’s nonfarm payrolls data for September on Friday would follow a better-than-expected ADP National Employment report on Wednesday.
Another beat on jobs data ultimately would weigh on gold, McKay said, “as it would reinforce the need for the Fed to continue with their hawkish stance for a bit longer.”
The Institute for Supply Management’s non-manufacturing PMI reading also came in slightly above expectations, suggesting underlying strength in the economy despite rising interest rates.
Upbeat data and hawkish comments from San Francisco Federal Reserve President Mary Daly on Wednesday cooled any hopes of a policy pivot.
Gold is sensitive to rising interest rates, as these increase the opportunity cost of holding non-yielding bullion.
“Gold needs to see a sharper slowdown in the U.S. and cooler prices for a bullish breakout to form,” Edward Moya, senior analyst with OANDA, said in a note.
“Gold seems poised to consolidate between $1,680 and $1,740 until we get both the NFP report and latest inflation readings.”
Spot silver fell 0.6% to $20.57 per ounce, while platinum firmed 0.5% to $923.12 and palladium gained 1.1% to $2,272.71.
