Gold rises as dollar and yields ease, with US nonfarm payrolls report in spotlight
GLD•Gold firms ahead of U.S. payrolls data
Gold prices firmed on Thursday as the U.S. dollar and Treasury yields eased, while investors strapped in for U.S. nonfarm payrolls data that could help shape expectations for the Federal Reserve's next policy move.
Spot gold XAU= rose 0.5% to $4,409.97 per ounce by 0219 GMT after hitting a near one-month low in the previous session.
U.S. gold futures GCcv1 gained 0.9% to $4,455.30.
The U.S. dollar was under pressure while U.S. Treasury yields slipped from multi-year highs. A softer dollar makes greenback-priced metals less expensive for holders of other currencies.
Key U.S. nonfarm payrolls data is due on Friday. Meanwhile, the ADP National Employment Report showed U.S. private payrolls increased moderately in August.
"The payrolls report will probably be the biggest defining moment of the week. If the jobs report misses expectations, and September rate hike bets decline, that could see gold move higher," said Ilya Spivak, head of global macro at Tastylive.
"If prices get over the $4,400 level they're currently in, we are going back in the direction of $4,500 and then $4,700."
Markets are currently pricing in a 62% probability of a U.S. rate hike this month, the CME FedWatch Tool showed.
U.S. economic activity increased modestly, employment rose slightly, and prices increased moderately in recent weeks, according to a mixed report published on Wednesday by the Fed that may do little to convince central bank policymakers one way or another as they weigh whether to raise interest rates at their September 15 to 16 meeting.
Gold is traditionally seen as an inflation hedge, but higher rates increase the opportunity cost of holding the non-yielding asset.
On the geopolitical front, top aides to U.S. President Donald Trump are pushing to keep the Iran war from escalating before November's midterm elections to staunch Republican electoral losses, four people familiar with the discussions said. White House officials will consider ramping up military action after the November 3 vote, the sources said.
