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Gold inches higher on lacklustre dollar ahead of US jobs data

The dollar was pinned near recent lows against other currencies
Last Updated 04 August 2021, 04:37 IST

Gold prices edged higher on Wednesday, helped by a subdued dollar, but the precious metal bobbled in a narrow range as investors awaited signals from US jobs data on the labour market recovery.

Spot gold rose 0.2 per cent to $1,814.27 per ounce by 8.33 am, while US gold futures were 0.1 per cent higher at $1,816.00.

"Gold, like the currency markets, appears to be in wait-and-see mode," said Jeffrey Halley, senior market analyst for Asia Pacific at OANDA.

"Gold's price action remains consolidative but structurally positive and I believe that points to further gains ahead. The converging 100- and 200-day moving averages suggest a breakout is coming and I believe Friday's US data will be a catalyst."

The National Employment Report by payrolls processing firm ADP due later in the day could set the stage for the much anticipated US non-farm payroll numbers on Friday.

The labour market would take time to heal from the effects of the pandemic and more is needed to be done for the economy to get fully back on track, US Federal Reserve Governor Michelle Bowman said on Tuesday. San Francisco Fed President Mary Daly expressed similar views.

The dollar was pinned near recent lows against other currencies.

Dovish remarks last week by Jerome Powell, the chairman of the US central bank, on interest rate hikes being "ways away" had sent gold rising more than 1 per cent while the dollar slipped to a one-month low.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Indicative of sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.2 per cent to 1,027.97 tonnes on Tuesday.

Silver gained 0.4 per cent to $25.65 per ounce, while platinum was up 0.1 per cent at $1,050.39.

Palladium rose 0.2 per cent to $2,652.99 per ounce, having hit a one-week high of $2,707.28 in the previous session.

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(Published 04 August 2021, 04:37 IST)

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