Gold steady as bond yields ease with focus on US jobs data

Spot gold was steady at $1,822.14 per ounce by 1020 GMT. U.S. gold futures gained 0.1% to $1,836.30.

Gold on Wednesday posted its worst losing run since 2016, dropping for an eighth straight session, as the likelihood of U.S. interest rates staying higher for longer weighed on sentiment.

Echoing investor demand, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell to its lowest since August 2019 on Wednesday. [GOL/ETF]

“Over the past few weeks gold really took a tumble, the big driver for that appears to be the rise in long term US interest rates,” said Edward Gardner, commodities economist at Capital Economics.

The benchmark 10-year bond yield slipped after data on Wednesday showed U.S. private payrolls increased far less than expected in September.

Markets now look forward to U.S. weekly jobless claims data due at 08:30 a.m. EDT (1230 GMT) and September’s non-farm payrolls report on Friday which is expected to show that employers added 170,000 jobs.

Traders are pricing in around a 37% chance of another rate hike from the Fed this year, according to the CME Fedwatch tool. Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding it.

“As we get towards the end of this year, we do think that the price of gold will appreciate next year and in our view that the Fed will cut interest rates by more than markets currently anticipate,” Gardner said.

Spot silver rose 0.8% to $21.12 per ounce, having slipped to its lowest since mid-March this week.

Platinum fell 0.4% to $863.20, after hitting its lowest in a year in the last session, and palladium eased 0.4% to $1,163.20, near a 5-year low touched on Wednesday.

Source: https://www.reuters.com/