Quick Notice on Metals: Gold Hits Three-Week Peak After weaker U.S. Jobs Data
Gold hits three-week peak after weaker U.S. jobs data
![Two Argor-Heraeus SA 250 gram gold bars at Solar Capital Gold Zrt. arranged in Budapest, Hungary, on Tuesday, March 22, 2022. Gold edged higher in Asian trading -- following its biggest weekly drop since June -- as investors weighed monetary policy tightening in the U.S. against the impact of the Russia-Ukraine war. Photographer: Akos Stiller/Bloomberg via Getty Images](https://image.cnbcfm.com/api/v1/image/107034768-1647969235321-gettyimages-1239418337-HUNGARY_GOLD.jpeg?v=1693295337&w=929&h=523&vtcrop=y)
Gold climbed to a three-week peak on Tuesday as the dollar and Treasury yields slipped after weaker labour market readings cast doubts over the chances of another rate hike by the Federal Reserve.
Spot gold was up 0.9% at $1,937.1907 per ounce. U.S. gold futures also rose 0.9% to $1,965.50.
The dollar fell against its rivals, reversing earlier gains, after data showed that U.S. job openings fell in July. The benchmark 10-year Treasury yields also ticked lower.
The downbeat Job Openings and Labor Turnover Survey (JOLTS)and consumer confidence reports suggest the Fed may not raise rates as much as previously anticipated, and that’s helping gold along with some short-covering, said Jim Wyckoff, senior market analyst at Kitco.
Investors now await the U.S. personal consumption expenditures price index due on Thursday and nonfarm payrolls on Friday for further clues on the interest rate trajectory.
According to the CME FedWatch tool, traders now see an 86% chance of the Fed leaving rates unchanged at its September meeting, up from 78% before the data.
Higher interest rates increase the opportunity cost of holding non-yielding bullion.
Reflecting sentiment, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.3% on Monday.
“The fact that the price has been recovering since the middle of last week suggests that the selling pressure exerted by speculative financial investors has abated,” Commerzbank analyst Carsten Fritsch wrote in a note.