Gold drops as investors brace for US jobs and inflation numbers

Gold fell more than 1% on Tuesday as the market consolidated ahead of US jobs and inflation data that could offer further clues to the Federal Reserve’s interest-rate outlook.

Spot gold fell 1% to USD 5,013 per ounce by 01:32 p.m. ET (1832 GMT). US gold futures for April delivery settled about 1% higher at USD 5,031 per ounce.

“We’re seeing a light pullback or consolidation ahead of a bevy of key economic data coming out later this week,” said David Meger, director of metals trading at High Ridge Futures.

January’s nonfarm payroll data is due on Wednesday, with economists expecting 70,000 jobs to have been added last month, according to a Reuters poll. January’s Consumer Price Index (CPI) is due on Friday.

US retail sales were unexpectedly unchanged in December, putting consumer spending and the overall economy on a slower growth path heading into the new year.

A softer economic outlook has strengthened expectations of lower interest rates, with traders pricing in two 25-basis-point rate cuts this year. Lower rates typically support non‑yielding bullion by reducing the opportunity cost of holding the metal.

Meger said the “weakness in the US dollar will likely continue to underpin prices,” noting that geopolitical tensions and expectations for lower interest rates still provide support for gold, alongside the psychological USD 5,000 level.

Indian investors piled into gold exchange-traded funds in January as prices soared, surpassing flows into equity funds for the first time, industry data showed on Tuesday.

Silver held in London vaults totaled 27,729 metric tons at the end of January, down 0.3% from December, while gold stocks rose 0.6% to 9,158 tons, the London Bullion Market Association said.

Spot silver slipped 3.3% to USD 80.63 an ounce, after rising nearly 7% in the previous session.

“Silver (exchange-traded product) outflows are keeping silver vulnerable to volatility in the near term and are key to track, but an undersupplied market suggests a recovery in the coming months,” Standard Chartered said in a note.

Spot platinum shed 1.8% to USD 2,084.42 per ounce, while palladium lost 2.1% to USD 1,709.82.

(Reporting by Anmol Choubey in Bengaluru; Editing by Anil D’Silva and Vijay Kishore)