Gold eases as firmer dollar counters bets of US Fed pause

GOLD prices edged lower on Monday (Jun 5) as the dollar firmed on strong US payrolls report, offsetting support from the prospects that the Federal Reserve would pause its rate hikes this month.

Spot gold was down 0.1 per cent at US$1,945.66 per ounce, as of 0041 GMT. US gold futures fell 0.3 per cent to US$1,963.10.

The dollar index rose 0.2 per cent, making greenback-priced bullion less affordable for overseas buyers.

Gold prices slipped more than 1 per cent on Friday after data showed US nonfarm payrolls rose by 339,000 jobs last month, much higher than an increase of 190,000 forecast by economists polled by Reuters. But the unemployment rate surged to a seven-month high of 3.7 per cent.

The higher unemployment reading prompted markets to price in a 78.7 per cent chance of the US Fed leaving interest rates unchanged at the June 13-14 meeting, according to the CME FedWatch Tool.

Non-interest-bearing bullion tends to become less attractive in a high-interest rate environment.

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Gold climbs as rate hike bets ebb after weaker US data

Asian shares on Monday extended a global rally on optimism that the Fed would pause its rate hikes this month, while oil jumped as Saudi Arabia pledged big output cuts in July.

Physical gold demand slowed in India last week as a recovery in domestic prices prompted buyers to postpone purchases while the weakening of the Chinese currency underpinned premiums in the top consumer.

Spot silver was down 0.1 per cent at US$23.57 per ounce, platinum was flat at US$1,003.69 per ounce, while palladium eased 0.1 per cent to US$1,418.45. REUTERS