Gold steady as US jobs data fuels rate hike jitters
Non-farm payrolls were less eventful than the previous employment data, but don’t challenge Fed move expectations, analyst says
10 July 2023 - 07:50
by Swati Verma
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Bengaluru — Gold prices were little changed on Monday after US jobs data last week cast doubts over the labour market’s strength, prompting investors to be more sceptical of the Federal Reserve’s rate hike trajectory.
Spot gold was steady at $1,923.62 per ounce by 3.47am GMT (5.47am). US gold futures were down 0.2% at $1,929.50 per ounce.
The labour department’s closely watched employment report on Friday showed the US economy added the smallest jobs in 2½ years in June, but persistently strong wage growth pointed to still-tight labour market conditions.
“The non-farms were less eventful than the prior ADP [employment data], but importantly, don’t seem to challenge expectations about a July hike by the Fed,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
“It would take a profound miss on the upcoming CPI data (July 12) to alter this view.”
Gold is highly sensitive to higher rates as they dampen the appeal of bullion, which pays no interest.
Prices have dropped more than 7% since reaching near-record levels in early May as investors scaled back expectations of an end to the US Federal Reserve’s rate-hiking cycle.
However, an Invesco survey of central bank and sovereign wealth funds published on Monday showed that an increasing number of countries are repatriating gold reserves as protection against the sort of sanctions imposed by the West on Russia.
Data on Friday showed Comex gold speculators raised their net long position by 12,733 contracts to 99,205 in the week ended July 3.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3% on Friday.
In other precious metals, spot silver was steady at $23.05 per ounce, platinum fell 0.1% to $907.34 and palladium eased 0.4% to $1,238.86.
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 steady as US jobs data fuels rate hike jitters
Non-farm payrolls were less eventful than the previous employment data, but don’t challenge Fed move expectations, analyst says
Bengaluru — Gold prices were little changed on Monday after US jobs data last week cast doubts over the labour market’s strength, prompting investors to be more sceptical of the Federal Reserve’s rate hike trajectory.
Spot gold was steady at $1,923.62 per ounce by 3.47am GMT (5.47am). US gold futures were down 0.2% at $1,929.50 per ounce.
The labour department’s closely watched employment report on Friday showed the US economy added the smallest jobs in 2½ years in June, but persistently strong wage growth pointed to still-tight labour market conditions.
“The non-farms were less eventful than the prior ADP [employment data], but importantly, don’t seem to challenge expectations about a July hike by the Fed,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
“It would take a profound miss on the upcoming CPI data (July 12) to alter this view.”
Gold is highly sensitive to higher rates as they dampen the appeal of bullion, which pays no interest.
Prices have dropped more than 7% since reaching near-record levels in early May as investors scaled back expectations of an end to the US Federal Reserve’s rate-hiking cycle.
However, an Invesco survey of central bank and sovereign wealth funds published on Monday showed that an increasing number of countries are repatriating gold reserves as protection against the sort of sanctions imposed by the West on Russia.
Data on Friday showed Comex gold speculators raised their net long position by 12,733 contracts to 99,205 in the week ended July 3.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3% on Friday.
In other precious metals, spot silver was steady at $23.05 per ounce, platinum fell 0.1% to $907.34 and palladium eased 0.4% to $1,238.86.
Reuters
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