Gold prices edged higher on Wednesday as the dollar eased and weaker-than-expected US jobs data cemented expectations that the Federal Reserve’s policy tightening cycle has come to an end. Spot gold rose 0.2% at $2,023.40 per ounce by 0538 GMT.
US gold futures for February delivery also rose 0.2% to $2,041.20.
“Volatility in gold prices is likely to remain capped heading into Friday’s US non-farm payrolls data,” said City Index Senior Analyst Matt Simpson.
“It might take a particularly weak set of numbers for gold to post strong gains from here – as many bullish fingers were likely burned with gold’s false break to a record high.”
Bullion climbed to a record high of $2,135.40 on Monday on elevated bets for a Fed rate cut, before dropping more than $100 in the same session, on uncertainty over the timing of the monetary policy easing.
Data on Tuesday showed US job openings fell to a more than two-and-a-half year low in October, signalling that higher rates were dampening demand for workers.
The dollar index fell 0.2% against a basket of currencies after rising to a two-week high on Tuesday, making gold less expensive for other currency holders.
Gold declines as Powell’s speech moves into spotlight
Focus now shifts to the Friday release of the November non-farm payrolls data that could provide more clues on US interest rate outlook ahead of Fed’s policy meeting next week.
Traders are pricing in about a 60% chance of a rate cut by March next year, CME’s FedWatch Tool shows.
Lower interest rates tend to support non-interest-bearing bullion.
Spot gold may bounce into a range of $2,033-$2,039 per ounce, as it has stabilized around a support of $2,009, according to Reuters technical analyst Wang Tao.
Silver rose 0.6% to $24.27 per ounce, while platinum gained 0.3% to $901.30. Palladium rose 0.9% to $943.01 per ounce, after hitting an over five-year low on Tuesday.
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