Gold edges as dollar dips on Wednesday

Gold edges as dollar dips on Wednesday

Shafaq News / Gold prices edged higher on Wednesday as the dollar eased and weaker-than-expected U.S. jobs data cemented expectations that the Federal Reserve's policy tightening cycle has come to an end.

Spot gold rose 0.2% at $2,023.40 per ounce by 0538 GMT. U.S. gold futures for February delivery also rose 0.2% to $2,041.20.

"Volatility in gold prices is likely to remain capped heading into Friday's U.S. non-farm payrolls data," said City Index Senior Analyst Matt Simpson.

"It might take a particularly weak set of numbers for gold to post strong gains from here – as many bullish fingers were likely burned with gold's false break to a record high."

Bullion climbed to a record high of $2,135.40 on Monday on elevated bets for a Fed rate cut, before dropping more than $100 in the same session, on uncertainty over the timing of the monetary policy easing.

Data on Tuesday showed U.S. job openings fell to a more than two-and-a-half year low in October, signalling that higher rates were dampening demand for workers.

The dollar index (.DXY) fell 0.2% against a basket of currencies after rising to a two-week high on Tuesday, making gold less expensive for other currency holders.

Focus now shifts to the Friday release of the November non-farm payrolls data that could provide more clues on U.S. interest rate outlook ahead of Fed's policy meeting next week.

Traders are pricing in about a 60% chance of a rate cut by March next year, CME's FedWatch Tool shows. Lower interest rates tend to support non-interest-bearing bullion.

Spot gold may bounce into a range of $2,033-$2,039 per ounce, as it has stabilized around a support of $2,009, according to Reuters technical analyst Wang Tao.


Shafaq Live
Shafaq Live
Radio radio icon