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Picture: 123RF/BASHTA
Picture: 123RF/BASHTA

Gold prices edged higher on Thursday, lifted by a subdued dollar and US treasury yields, although prices were confined to a narrow range as investors awaited more US data that could affect the outlook for the Federal Reserve’s rate-hike trajectory.

Spot gold was up 0.4% at $1,722.09 per ounce, at 3.56am GMT. US gold futures rose 0.6% to $1,730.10.

Benchmark US 10-year treasury yields eased after recording their biggest one-day jump since September 26 on Wednesday, while the dollar index ticked 0.1% lower. Lower yields decrease the opportunity cost of holding gold, which pays no interest.

"A weaker-than-expected non-farm payrolls print would likely constrain the Fed’s pace of tightening," said Thomas Westwater, an analyst with DailyFX.

"That would assuage market fears and clear the way for higher gold prices by sapping the dollar’s safe-haven strength."

The US labor department’s more comprehensive and closely watched nonfarm payrolls (NFP) data, due on Friday, follows a strong ADP National Employment Report released on Wednesday. The ADP report showed private employment rose by 208,000 jobs last month, while separately the Institute for Supply Management’s (ISM) non-manufacturing PMI reading 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 needs to see a sharper slowdown in the US 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."

Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), marked their third straight day of inflows on Wednesday. Spot silver rose 0.4% to $20.77 per ounce, platinum was up 0.4% at $922.56 and palladium gained 1% to $2,270.41. 

Reuters

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