Gold gains as dollar slips
Bengaluru — Gold prices gained on Tuesday, propped up by a sluggish dollar, with investors looking ahead to US non-farm payrolls data which could be the key to the US Federal Reserve’s stimulus-tapering decision.
Spot gold rose 0.3% to $1,815.16 an ounce by 3.54am GMT. US gold futures were up 0.3% at $1,817.40.
The dollar index slipped to a new two-week trough, extending declines after Fed chief Jerome Powell’s dovish remarks last week at the Jackson Hole symposium, where he gave no clear signal on the central bank’s tapering timeline.
Gold is seen as a hedge against inflation and currency debasement, which can be caused by the huge stimulus measures.
“The momentum is strong for now. So probably gold will inch higher over next couple of days. But once the report finally arrives, it could be a game changer depending on how strong or weak the non-farm numbers are,” said OCBC Bank economist Howie Lee.
However “selling pressures will start to build once the tapering process officially kicks in”.
The US non-farm payrolls report for August is due on Friday. The market is expecting an increase of 728,000 jobs, unemployment to fall to 5.2% from 5.4%, and average hourly earnings to rise 0.4% month-on-month.
In his remarks, Powell said that if job growth continues, the central bank could start to cut its asset purchases this year.
Aiding support to bullion prices, concerns over China’s slowing economic growth and regulatory changes weighed on Asian stock markets.
Silver was flat at $24.06 an ounce but was headed for third straight month of declines, falling 5.4%.
Platinum eased 0.1% to $1,005.09. It was on track for fourth consecutive monthly loss, sliding more than 4%.
Palladium fell 0.5% to $2,480.49 and was headed for its worst monthly performance in seven months, down 6.8%.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.