Gold ticks up from 3-week lows after US jobs data

[BENGALURU] Gold prices edged up from three-week lows on Friday after data showed US jobs growth was slower than expected last month even as the Federal Reserve signalled faster rate hikes, which sent bullion on track for a weekly fall.

Spot gold was last up 0.5 per cent at US$1,797.10 per ounce by 13.43 ET (1843 GMT), while US gold futures settled up 0.5 per cent at US$1,797.40.

"With less than expected jobs added in December, but with the unemployment rate in the US falling back toward a multi-year low, it was somehow a mixed report for gold," UBS analyst Giovanni Staunovo said.

Nonfarm payrolls rose by 199,000 jobs last month amid worker shortages, lower than a forecast of 400,000, with moderate job gains expected in the near term as spiralling Covid-19 infections disrupt economic activity.

"A stronger than expected print was more likely to have pressured prices lower, but a weaker print has not significantly altered market rate hike expectations," Standard Chartered analyst Suki Cooper said.

"The gold price reaction suggests the market is more focussed on inflation risks ahead of the FOMC meeting."

The dollar fell 0.6 per cent, making bullion cheap for overseas buyers.

Gold prices earlier hit a low since Dec 16 at US$1,782.10 and were set for a weekly drop of about 1.7 per cent, the biggest since the week of Nov. 26, as benchmark US 10-year Treasury yields touched two-year high.

The Fed minutes released on Wednesday showed officials had discussed shrinking the central bank's overall asset holdings and raising rates sooner than expected to fight inflation.

The metal is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion.

Spot silver edged up 1.1 per cent at US$22.39 per ounce, platinum dropped 0.6 per cent to US$958.95 per ounce and palladium climbed 3.2 per cent to US$1,933.20 per ounce.

REUTERS