Gold gains as US dollar, yields slip; focus on jobs data

Nov 2 – Gold firmed on Thursday as the US dollar and Treasury yields retreated on raised bets that the Federal Reserve may be done raising interest rates, while investors awaited US non-farm payrolls data for further cues.

Spot gold was up 0.2% at USD 1,985.69 per ounce by 3 p.m. EDT (1900 GMT). US gold futures settled 0.3% higher at USD 1,993.50.

Helping bullion’s appeal, the dollar index slipped 0.7%, and benchmark US 10-year note yields fell to a near three-week low.

Gold is supported as there are signs of cracks in the US labor market, which probably signals the Fed is backing off completely from rate hikes, said Bob Haberkorn, senior market strategist at RJO Futures.

Data showed US weekly jobless claims rose moderately as the labor market continued to show few signs of a significant slowdown.

The Fed held rates steady on Wednesday as policymakers considered whether financial conditions may be sufficiently tight to control inflation.

The market now sees an 80% chance of another Fed pause in December, according to the CME FedWatch Tool.

Investors will also monitor the US non-farm payrolls report due on Friday for further cues on the US central bank’s policy path.

Higher interest rates raise the opportunity cost of holding bullion.

Gold rose over 7% in October and surpassed the key USD 2,000-per-ounce level last week on safe-haven demand amid growing unrest in the Middle East.

“Gold already prices in the geo-political risks. If the war expands, then prices would benefit more,” Haberkorn added.

Spot silver fell 0.9% to USD 22.77 per ounce, while platinum added 0.2% to USD 922.11.

Palladium gained 0.8% to USD 1,110.75 but was down nearly 40% for the year so far.

Shares of Johannesburg-based precious metals producer Sibanye Stillwater fell more than 3% after the company said it was considering further changes at its US palladium mines to adjust the operations to metal prices that have dropped faster than anticipated.

(Reporting by Anushree Mukherjee and Ashitha Shivaprasad in Bengaluru; Editing by Tasim Zahid and Shailesh Kuber)