Gold dips to one-week low as US jobs data awaited

Gold prices fell to their lowest in more than a week on Monday as the US dollar firmed, while market focus shifted to a series of economic data due this week for clues as to the extent of rate cuts at the Federal Reserve’s September meeting.

Spot gold fell about 0.1% to USD 2,501.20 per ounce, as of 9:37 a.m. ET (1337 GMT) after dipping to its lowest since Aug. 23 earlier in the session.

Trading is expected to be light with US markets closed for a holiday.

“To move higher from here we need to have more clarity on whether it will be a 25 (bps) rate cut or a 50 (bps) rate cut and probably by the end of the week, with the employment data, we might get more clarity on that side,” UBS analyst Giovanni Staunovo said.

US economic data pending this week includes the ISM surveys, JOLTS job openings, ADP employment and the non-farm payrolls report.

The markets broadly expect the Fed to cut rates at its Sept. 17-18 meeting, the first in this policy cycle.

According to the CME FedWatch tool, investors now see a 69% chance of a 25-basis-point cut and a 31% chance of a 50 bp cut in September. Lower rates reduce the opportunity cost of holding non-yielding gold.

“With earnings season now largely completed and a Fed rate cut on Sept. 18 all-but guaranteed, investors appear content to remain long despite some recent firming of both short rates and the US dollar,” Mike Ingram, market analyst at Kinesis Money, said in a note.

“High levels of geopolitical risk and portfolio diversification remain as additional supports.”

The dollar hovered near a two-week peak hit earlier in the session, making bullion more expensive for holders of other currencies.

Spot silver fell 1.2% to USD 28.51 per ounce, and hit its lowest in over two weeks.

Platinum rose 0.2% at USD 927.55 and palladium rose 0.8% at USD 973.25.

(Reporting by Rahul Paswan in Bengaluru; Editing by Kevin Liffey, Mrigank Dhaniwala, and Sharon Singleton)