Gold slips on firmer dollar ahead of US payrolls data

GOLD prices fell on Thursday (Apr 6) as the dollar firmed ahead of a much awaited US non-farm payrolls report, as investors sought clarity on whether the Federal Reserve might take a breather on its monetary tightening path.

Spot gold was down 0.3 per cent at US$2,014.79 per ounce, as of 0101 GMT, after hitting an over one-year high on Wednesday. US gold futures were steady at US$2,034.70.

The dollar index was 0.1 per cent higher, making bullion expensive for overseas buyers.

The US services sector slowed more than expected in March as demand cooled, while a measure of prices paid by services businesses fell to the lowest in nearly three years.

The ADP National Employment report on Wednesday showed that US private employers hired far fewer workers than expected in March, suggesting the labour market was cooling.

Investors now await Friday’s non-farm payrolls report for March, with economists polled by Reuters expecting new jobs of about 240,000.

Markets see a 54.2 per cent chance of the Fed standing pat on interest rates in May, according to the CME FedWatch tool.

Cleveland Federal Reserve Bank president Loretta Mester, however, said on Wednesday it was too early to know if the Fed would need to raise interest rates at its May policy meeting, even as she predicted rates will need to move higher.

While gold is traditionally considered a hedge against inflation, higher interest rates dim non-yielding bullion’s appeal.

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Spot silver shed 1 per cent to US$24.73 per ounce, platinum rose 0.3 per cent to US$999.68 and palladium eased 0.1 per cent to US$1,428.25. REUTERS