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Gold rises as focus shifts to US private sector payroll data
Gold prices edged higher on Monday, November 3, surpassing $4,000 an ounce, as investors awaited US private sector jobs data due this week to assess the likelihood of further interest rate cuts by the Federal Reserve this year.
Spot gold rose 0.34% to $4,015.53 an ounce.
Gold futures for December delivery climbed 0.69% to $4,024.00.
Prices were pressured by a stronger dollar and diminished investor expectations of a Fed rate cut following Jerome Powell's hawkish comments last week. The precious metal was also weighed down by easing trade tensions between the US and China.
The dollar index held near its highest level in three months, making dollar-denominated gold more expensive for holders of other currencies.
The US Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, its second such cut this year, bringing the target range for the federal funds rate to between 3.75% and 4.00%.
Data from the CME Group’s FedWatch shows that markets now expect a rate cut in December with a 71% probability, compared to over 90% before Powell’s remarks.
Gold, which does not offer yields, thrives when interest rates are low and during times of economic uncertainty.
“The pause in gold still looks like a pause, not a crash,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a note. “Seasonal pullbacks, temporary noise about Chinese policy, and a strong dollar explain this short-term pullback, but nothing changes the long-term scenario.”
US President Donald Trump said on Thursday that he had agreed with his Chinese counterpart, Xi Jinping, to reduce tariffs on Chinese goods in exchange for Beijing cracking down on illicit fentanyl trade, resuming purchases of US soybeans, and ensuring continued exports of rare earth minerals.
As for other precious metals, silver fell 0.5% in spot trading to $48.41 an ounce, platinum dropped 0.1% to $1,566.40, and palladium declined 0.6% to $1,424.88.
