Global gold prices flat as rate hike worries ease
Gold prices are steady as the US dollar inch lower, with the latest US jobs report easing fears of inflation and faster US rate hikes
Gold prices were steady on Monday as the US dollar inched lower, with the latest US jobs report easing fears of inflation and faster US rate hikes.
Spot gold was flat at $1,323.07 per ounce at 8.45am. US gold futures for April delivery were little changed at $1,323.70 per ounce. The dollar index against a basket of currencies was down 0.1% at 90.038.
“The labour report that we saw in the US on Friday has spilled over into this week ... Slowdown in the growth of wages last month has certainly eased concerns about more aggressive rate hikes,” said ANZ analyst Daniel Hynes.
Inflation worries faded after US data on Friday showed nonfarm payrolls jumped by 313,000 jobs last month, but annual growth in average hourly earnings slowed to 2.6% after a spike in January.
Money market traders stuck to bets that the US Federal Reserve would raise interest rates three times this year, with only around a one-in-four chance seen for a fourth rate hike in 2018.
A relief rally swept across Asian share markets on Monday in the wake of the jobs report.
Inflation concerns generally boost gold, which is seen as a safe-haven against rising prices. But expectations the Fed could raise interest rates to fight inflation make gold less attractive because it is not interest-yielding.
“We still are somewhat wary on gold short-term as we suspect that the precious metal will struggle on account of a stronger dollar, which we expect to start perking up as we head closer to the (next) Fed meeting,” INTL FCStone analyst Edward Meir said in a note. The central bank is due to meet from March 20.
Spot gold may revisit its 9 March low of $1,312.99 per ounce, as suggested by a double-top and a retracement analysis, according to Reuters technical analyst Wang Tao.
Meanwhile, speculators raised their net long position in gold by 4,178 contracts to 161,812 contracts, Commodity Futures Trading Commission (CFTC) data showed.
Among other precious metals, silver fell 0.1% to $16.58 per ounce. Palladium was down 0.1% at $994.72 per ounce, while platinum was flat at $964.50 per ounce. Reuters
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