Gold listless as investors seek direction from US jobs data

Gold prices were little changed on Wednesday as investors awaited a key US jobs report for clues on when the Federal Reserve might start reducing its pandemic-era stimulus measures.

Spot gold was steady at $1,814.01 per ounce by 0343 GMT, while US gold futures eased 0.1% to $1,816.00.

The dollar index clawed 0.1% higher, but hovered closer to a more than three-week low hit on Tuesday.

Gold rises on weaker dollar

"A print above 1 million jobs will put the taper back front and centre and be bearish for gold. Whereas a number around 700,000, or lower, will alleviate those concerns and be supportive of gold," said Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA.

Gold "lacks the momentum to trade meaningfully away from the 100 and 200-day moving average zone," he added.

Economists polled by Reuters see nonfarm payrolls increased by 750,000 in August.

A strong recovery in the labour market is a crucial prerequisite for Fed's decision on tapering.

Last week, Fed Chair Jerome Powell acknowledged in his remarks at the Jackson Hole symposium that tapering could begin this year, but it will remain cautious in its decision to raise interest rates.

His comments were deemed dovish and sent gold up 1.4% on Friday.

While gold is considered a hedge against inflation and currency debasement, caused by massive stimulus measures, lower interest rates also reduce the opportunity cost of holding non-yielding bullion.

"The lack of follow through in gold (after Jackson Hole symposium) is very telling of the fact that the market recognises that the direction for policy is now starting to wind back stimulus," said DailyFX currency strategist Ilya Spivak.

Indicative of sentiment, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.2% to 1,000.26 tonnes on Tuesday, its lowest level since April 2020.

Silver fell 0.2% to $23.85 per ounce, while platinum eased 0.3% to $1,009.88. Palladium rose 0.3% to $2,475.25.