Gold prices fall ahead of US jobs data

  • 05 October, 2021
  • 12:09 pm EEST

Gold prices fell during trading today, Tuesday, with the rise in the price of the dollar, which benefited from the weak risk sentiment.

This comes amid expectations that bullion will witness volatile trade in the run-up to the US jobs numbers expected to be released next Friday, which may dictate the Federal Reserve’s lower plans.

Gold prices today

By 08:00 am GMT, the price of gold futures contract – for December delivery – decreased by 0.4%, to record $1,760.50 an ounce.

The spot price for the yellow metal also declined by 0.64%, recording $1,758.21 an ounce, after reaching $1,770.41 on Monday, its highest since September 23.

The dollar index rose, making gold more expensive for buyers who hold other currencies, coinciding with the decline in stock markets on concerns that higher energy prices threaten to dampen economic growth.

Regression factors

Weak stocks are pushing Asian investors to buy the dollar, putting pressure on gold, said Jeffrey Haley, chief market analyst for the Asia Pacific region at Onda.

He added that the precious metal will be in the range of $1750-1785.00 before the US jobs report.

Aside from inflation, fragile US-China trade relations, China’s Evergrande debt crisis, and impasse over the US debt ceiling, it has stimulated some safe-haven inflows into gold as well, providing a floor for bullion prices, Reuters reported.

“Gold may find support on dips to $1,750.00 this week, with rising inflation and US financial concerns,” Halley said.

He added that while uncertainty will support gold to some extent, the direction of US monetary policy will ultimately be the winner.

American Jobs

Non-farm payrolls are expected to show continued improvement in the labor market, likely allowing the Federal Reserve to start cutting stimulus before the end of the year.

Low stimulus and higher interest rates raise bond yields, and put pressure on gold as it translates into an increased opportunity cost of holding non-interest bullion.

“What moves the gold markets at this point is the amount of time and on what time frame the prices will be raised,” said Ilya Spivak, currency strategist at DailyForex.

Some analysts said the impact on gold may be limited since the decline was priced in.

Metal Prices

Silver futures contract for December delivery fell 0.22% to $22.60 an ounce.

The spot platinum price also fell 0.42% to $965.23 while palladium rose 1.05% to $1,927.32.

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