Gold steadied on Thursday, hovering below Tuesday's seven-week high, as investors awaited US jobs data for further clues on the outlook for interest rates. Gold rallied through most of July as the dollar fell on reduced expectations for a third US rate increase this year. Inflation has been contained even though the labour market appears to be in its best shape in many years and despite double-digit US earnings growth in the second quarter.
Reduced rate rise expectations tend to weaken the dollar, making dollar-priced gold cheaper for non-US investors. The dollar fell against the yen, euro and Swiss franc, after weaker-than-expected US services sector data worried investors and stoked doubts that the Federal Reserve would raise interest rates again in 2017.
Spot gold was 0.15 percent higher at $1,268.15 an ounce by 2:02 pm EDT (1802 GMT), not far from Tuesday's seven-week high of $1,273.97. "The dollar is weak so there's a little bit of spillover effect from that," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago, referring to a source of support for gold prices. "There's position squaring ahead of the jobs data. Nobody wants to get caught with any surprises."
Among other precious metals, platinum rose 1.8 percent to $958.95 per ounce after surging above its 200-day moving average to its highest since June 7 at $964.20. Silver rose 0.6 percent to $16.64 per ounce, while palladium was 0.9 percent lower at $886.75 per ounce, on track to break a streak of nine-sessions of gains.
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