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Gold climbs as yields retreat with US jobs report in focus

August 4, 2022By Reuters

Aug 4 (Reuters) – Gold prices edged higher on Thursday, supported by a pullback in the US Treasury yields, while cautious investors awaited key US non-farm payrolls report due this week for more cues on the Federal Reserve’s rate-hike stance.

Spot gold was up 0.3% to USD 1,769.74 per ounce, as of 0628 GMT. US gold futures rose 0.5% to USD 1,785.60.

Benchmark US 10-year Treasury yields slipped from their highest levels in more than one week, reducing the opportunity cost of holding non-interest-bearing gold.

“Most of the investors are on the sidelines because there are tensions brewing between US and China, so people are not sure what is going to happen,” said Brian Lan, managing director at dealer GoldSilver Central.

“Furthermore, there is also another area that people are thinking that if interest rates are going up, probably holding the dollar might make more sense than holding gold. So I expect gold prices to be range-bound in the near term.”

Limiting gold’s advance, the dollar =USD hovered near its highest this week after hawkish comments from Fed officials.

US central bank officials voiced their determination to rein in high inflation, although one noted a half-percentage-point hike in its key interest rate next month might be enough to march towards that goal.

Rising US interest rates dull non-yielding gold’s appeal.

After a couple of strong economic readings this week, focus now shifts to US jobs data due on Friday that could offer more clarity on Fed’s aggressive tightening to fight stubborn inflation.

Indicative of sentiment, holdings of SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, fell to their lowest since mid-Jan at 1,000.65 tonnes on Wednesday.

Meanwhile, US House of Representatives Speaker Nancy Pelosi left Taiwan on Wednesday, adding that Chinese anger cannot stop world leaders from traveling to the self-ruled island claimed by Beijing.

Spot silver dipped 0.1% to USD 20.02 per ounce, platinum fell 0.2% to USD 896.14, and palladium was 0.3% higher at USD 2,022.55.

(Reporting by Brijesh Patel and Eileen Soreng in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)

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