Bengaluru — Gold prices edged lower in rangebound trading on Monday as the dollar firmed after a strong US payrolls report, overshadowing support from prospects that the Federal Reserve would pause its rate hikes this month.
Spot gold was down 0.2% at $1,944.69 per ounce by 2.56am GMT (4.56am), trading in a $6 range. Prices were hovering near their lowest levels since May 30.
US gold futures fell 0.4% to $1,961.30.
Gold prices slipped more than 1% on Friday after data showed US nonfarm payrolls rose by 339,000 jobs last month, exceeding a 190,000 forecast by economists polled by Reuters. But the unemployment rate surged to a seven-month high of 3.7% from a 53-year low of 3.4% in April.
The higher unemployment reading prompted markets to price in a 79.3% chance of the Fed leaving interest rates unchanged at its June 13-14 meeting, according to the CME FedWatch Tool.
“Money markets continue to favour a pause (as did comments from Fed vice-chair nominee Philip Jefferson), so it may limit the downside for gold even if it has lost some safe-haven flows from debt-ceiling concerns … The question now is whether [gold] will break support at $1,934 to bring $1,900 into focus,” City Index senior market analyst Matt Simpson said.
Non-interest-bearing bullion tends to become less attractive in a high interest rate environment.
The US House of Representatives last week passed a bill to suspend the $31.4-trillion debt ceiling, and averted a first-yet default.
The dollar index rose 0.1%, making greenback-priced bullion less affordable for overseas buyers.
Asian shares extended a global rally on optimism that the Fed would pause its rate hikes this month, while oil prices jumped.
Spot silver inched down 0.2% to $23.53 per ounce, platinum rose 0.2% to $1,005.00 per ounce, while palladium shed 0.6% to $1,412.46.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.