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Gold muted as US jobs data raises doubts over Fed rate-hike path

September 5, 2022By Reuters

Sept 5 (Reuters) – Gold prices were steady on Monday, having posted their best day in a month in the last session after a US jobs report showed unemployment rising in August, suggesting the Federal Reserve might slow the pace of rate hikes.

Spot gold was flat at USD 1,710.88 per ounce by 0523 GMT. US gold futures were little changed at USD 1,723.10.

Gold rose as much as 1.3% on Friday after data showed US employers hired more workers than expected in August, but moderate wage growth and a rise in the unemployment rate to 3.7% suggested the labor market was starting to loosen.

“With the Fed meeting just over two weeks away and their ‘blackout period’ fast approaching, any comments from Fed members this week will be scrutinised by traders as they have the ability to move the needle on Fed policy,” said Matt Simpson, a senior market analyst at City Index.

“Any comments alluding to a 75 bp hike could keep gold prices under pressure.”

Fed’s next policy meeting is scheduled for Sept. 20-21.

“Gold gained on Friday as more Americans returned to the workforce. Any easing of the tight labour market will help the Fed tame inflation and potentially reduce its need to tighten rates aggressively,” ANZ said in a note.

Gold tends to perform badly amid a high-interest rate environment as it yields no interest.

The dollar index hit a 20-year high, making gold expensive for holders of other currencies.

Speculators cut net long position in COMEX gold by 9,599 contracts to 20,726 in the week to Aug. 30, while net short position increased in COMEX silver, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Spot silver was flat at USD 18.02 per ounce, platinum rose 0.2% to USD 836.50 per ounce, while palladium gained 0.7% to USD 2,037.50.

Stronger-than-expected platinum shipments to China in the first half of the year spurred shortages elsewhere, as supply declined from mines and recycling, the World Platinum Investment Council said.

(Reporting by Ashitha Shivaprasad and Eileen Soreng in Bengaluru; Editing by Maju Samuel)


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