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Gold firms as dollar slips ahead of US data


Spot gold rose 0.3 per cent to $2,029.92 per ounce and U.S. gold futures settled down 0.1 per cent at $2,046.40

Gold strengthened on Thursday on a softer dollar in the run-up to U.S. non-farm payrolls data, as traders hoped for signs of a weaker labour market to bolster chances of a rate cut by the Fed as early as March.

Spot gold rose 0.3 per cent to $2,029.92 per ounce by 1925 GMT. U.S. gold futures settled down 0.1 per cent at $2,046.40.

The markets have gotten in front of themselves on the interest rate expectations, said Chris Gaffney, president of world markets at EverBank, adding that the only risk to metals prices in 2024 was if the Fed has to keep interest rates higher for longer.

On Monday, bullion reached an all-time high of $2,135.40 on elevated bets for a Fed rate cut, before declining more than $100 on uncertainty over the cut’s timing.

Traders were pricing a 62 per cent possibility of a rate cut by March next year, according to CME’s FedWatch Tool. Lower interest rates tend to support non-interest-bearing bullion. Benchmark 10-year Treasury yields were close to three-month lows, while the U.S. dollar slipped 0.6 per cent, making gold cheaper for other currency holders.

While “drivers for a further gold rally are set in place,” gold should consolidate and spend some time testing these new price levels, according to Everett Millman, chief market analyst at Gainesville Coins.

After a rise in weekly U.S. jobless claims, traders positioned for the non-farm payrolls data on Friday in search of more signs of a weaker labour market.

Spot silver dropped 0.4 per cent to $23.79 per ounce, platinum added 2.1 per cent to $908.74, and palladium jumped 2.8 per cent to $969.94.

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