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June 20, 2024
PI Global Investments
Gold

Gold steady as traders await jobs data for Fed cues


Gold prices were little changed on Wednesday as higher U.S. dollar and bond yields kept a lid on bullion’s upside while investors looked out for more jobs data to gauge the Federal Reserve’s next steps on monetary policy.

 

FUNDAMENTALS

* Spot gold was up 0.1% at $2,042.35 per ounce, as of 0200 GMT, after hitting a two-week low in the previous session. U.S. gold futures rose 0.3% to $2,049.40 per ounce.

* Lowering gold’s appeal, the dollar index lingered near a three-week peak hit in the previous session, while yields on 10-year Treasury notes rose to 3.9255%.

* Minutes of the Dec. 12-Dec. 13 Fed meeting released on Wednesday showed officials were convinced inflation was coming under control and were concerned about the damage that “overly restrictive” monetary policy might do to the economy.

* However, the minutes noted an elevated degree of uncertainty about the outlook on rate cuts, with policymakers still seeing a need for rates to stay restrictive for some time.

* Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

* Futures markets see a 72% chance that the Fed could begin cutting rates in March, compared with a 90% chance a week ago, according to CME’s FedWatch Tool.

* Data out on Wednesday showed U.S. manufacturing contracted further in December, though the pace of decline slowed, while U.S. job openings fell for the third straight month in November, pointing to easing labour market conditions.

* Investors now await the weekly jobless claims data due at 1330 GMT and the non-farm payrolls report on Friday for further clarity on how much room the Fed has to lower rates.

* Spot silver fell 0.2% to $22.92 per ounce, while platinum slipped 0.4% to $967.37. Palladium fell 0.2% to $1,064.81.

DATA/EVENTS (GMT) 0900 Eurozone HCOB Svcs Final PMI Dec 0930 UK Composite PMI Final Dec 1315 US ADP employment Dec 1330 US Initial Jobless Clm w/e Dec. 30 1445 US S&P Comp, Svcs PMI Dec (Reporting by Harshit Verma in Bengaluru; Editing by Mrigank Dhaniwala)

 



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