Gold near three-week high as markets cut back US rate hike bets
GOLD prices hovered near three-week highs on Wednesday (Aug 30), as investors pared back bets of further US interest rate hikes in response to soft economic readings, with more data eyed this week to analyse the outlook.
Spot gold was flat at US$1,936.17 per ounce by 0328 GMT, about US$2 below its highest levels since Aug 7 hit on Tuesday. US gold futures steadied at US$1,964.30.
US Treasury yields slipped to three-week lows and the US dollar weakened on Tuesday, after data showed job openings dropped to the lowest level in nearly 2½ years in July, while consumer confidence fell more than expected in August.
Lower rates burnish demand for non-interest paying gold.
“It’s all about the US dollar and yields, and if US data continues to soften, we can expect higher gold prices on the back of reduced bets of another Fed hike,” said Matt Simpson, a senior analyst at City Index.
“Of course, the risk here is that the JOLTS report was a lone wolf and if the US GDP and NFP data comes in hot, hold on to your gold hats as we could easily see on Tuesday’s gains reverse.”
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Investors now await the Commerce Department’s second take on April-June GDP later in the day, PCE price index on Thursday, and the non-farm payrolls report on Friday.
The Federal Reserve is expected to stand pat at its meeting next month, with markets pricing in a 53 per cent chance of another pause at the November meeting compared to 38 per cent a day earlier, according to the CME’s FedWatch Tool.
Gold may extend gains to US$1,948 per ounce, as it has cleared a resistance at US$1,936, said Reuters technical analyst Wang Tao.
Elsewhere, spot silver fell 0.4 per cent to US$24.63 per ounce, but was hovering close to a one-month high.
Platinum eased 0.1 per cent to US$975.07, having climbed to its highest level since Jul 19 in the previous session. Palladium shed 0.8 per cent to US$1,239.38. REUTERS
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