Gold holds steady as falling US jobs data casts doubt on Fed rate hikes

Bengaluru — Gold prices were steady on Monday, having posted their best day in a month in the last session after a US jobs report showed unemployment rising in August, suggesting the Federal Reserve might slow the pace of rate hikes.

Spot gold was flat at $1,711.69 per ounce by 5.52am. US gold futures were little changed at $1,723.10.

Gold rose as much as 1.3% on Friday after data showed US employers hired more workers than expected in August, but moderate wage growth and a rise in the unemployment rate to 3.7% suggested the labour market was starting to loosen.

“With the Fed meeting just over two weeks away and their 'blackout period' fast approaching, any comments from Fed members this week will be scrutinised by traders as they have the ability to move the needle on Fed policy,” said Matt Simpson, a senior market analyst at City Index. “Any comments alluding to a 75bp hike could keep gold prices under pressure.”

The Fed's next policy meeting is scheduled for September 20-21.

Gold tends to perform badly amid a high-interest rate environment as it yields no interest.

The dollar index hit a 20-year high, making gold expensive for holders of other currencies.

Speculators cut net long position in Comex gold by 9,599 contracts to 20,726 in the week to August 30, while net short position increased in Comex silver, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Spot silver was steady at $18.03 per ounce, platinum unchanged at $835.24 per ounce, while palladium gained 0.4% to $2,031.18.

Stronger-than-expected platinum shipments to China in the first half of the year spurred shortages elsewhere, as supply declined from mines and recycling, the World Platinum Investment Council said.

Reuters