Gold loses ground on robust dollar as focus turns to nonfarm payrolls
Metal slips as investors await US jobs report, which will be crucial to the Federal Reserve’s schedule for tapering support
06 October 2021 - 07:38
byEileen Soreng
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold prices fell on Wednesday, pressured by a firmer dollar and US treasury yields, while investors focused on US nonfarm payrolls data that would be crucial to the Federal Reserve’s schedule for tapering support.
Spot gold fell 0.3% to $1,755.05/oz by 3.15am GMT, while US gold futures were 0.3% lower at $1,755.50.
The dollar held close to its 2021 highs, denting gold's appeal for those holding other currencies.
The benchmark US 10-year treasury yields ticked higher nearing a more than three-month peak touched last week.
Gold’s price momentum is skewed downward on the basis of monetary policy expectations, IG Market analyst Kyle Rodda said.
“There’s still significant signs of cost pressures in the global economy and that's going to keep the focus on central banks and tightening policy.”
Gold is often viewed as an inflation hedge, but reduced central bank stimulus and interest rate hikes tend to push government bond yields up, translating into a higher opportunity cost for holding non-interest yielding bullion.
Focus is now on Friday’s US payrolls data, which is expected to show 488,000 jobs were added in September.
“The upcoming nonfarm payroll report could be a game-changer for gold prices, so prices are likely to consolidate between the $1,745 and $1,775 range,” Edward Moya, senior market analyst at brokerage Oanda, said in a note.
“Once tapering is fully priced in, financial markets will grow fixated over the risks to the 2022 outlook and that will be the greenlight for many investors to return to bullion.”
Chicago Fed president Charles Evans said on Tuesday he still believed supply bottlenecks were driving most of the recent increase in inflation and would subside. He also repeated that the central bank was close to begin reducing its monthly asset purchases.
Spot silver fell 0.9% to $22.46/oz, platinum slipped 1.2% to $950.38, and palladium was down 0.5% at $1,904.30.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold loses ground on robust dollar as focus turns to nonfarm payrolls
Metal slips as investors await US jobs report, which will be crucial to the Federal Reserve’s schedule for tapering support
Bengaluru — Gold prices fell on Wednesday, pressured by a firmer dollar and US treasury yields, while investors focused on US nonfarm payrolls data that would be crucial to the Federal Reserve’s schedule for tapering support.
Spot gold fell 0.3% to $1,755.05/oz by 3.15am GMT, while US gold futures were 0.3% lower at $1,755.50.
The dollar held close to its 2021 highs, denting gold's appeal for those holding other currencies.
The benchmark US 10-year treasury yields ticked higher nearing a more than three-month peak touched last week.
Gold’s price momentum is skewed downward on the basis of monetary policy expectations, IG Market analyst Kyle Rodda said.
“There’s still significant signs of cost pressures in the global economy and that's going to keep the focus on central banks and tightening policy.”
Gold is often viewed as an inflation hedge, but reduced central bank stimulus and interest rate hikes tend to push government bond yields up, translating into a higher opportunity cost for holding non-interest yielding bullion.
Focus is now on Friday’s US payrolls data, which is expected to show 488,000 jobs were added in September.
“The upcoming nonfarm payroll report could be a game-changer for gold prices, so prices are likely to consolidate between the $1,745 and $1,775 range,” Edward Moya, senior market analyst at brokerage Oanda, said in a note.
“Once tapering is fully priced in, financial markets will grow fixated over the risks to the 2022 outlook and that will be the greenlight for many investors to return to bullion.”
Chicago Fed president Charles Evans said on Tuesday he still believed supply bottlenecks were driving most of the recent increase in inflation and would subside. He also repeated that the central bank was close to begin reducing its monthly asset purchases.
Spot silver fell 0.9% to $22.46/oz, platinum slipped 1.2% to $950.38, and palladium was down 0.5% at $1,904.30.
Reuters
JSE faces weaker Asian markets on Wednesday as investors eye US jobs report
MARKET WRAP: JSE joins bounce back from Monday’s tech sell-off
JSE lifts as investors await US jobs report for direction
JSE likely to be choppy as oil holds its gains
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Oil futures at three-year high after Opec+ set to carry on with plan
Global stocks rebound as inflation concerns ease
Weakening rand has analysts scratching their heads
Gold price slips as dollar index rises
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.