Gold holds steady after weak US jobs data reinforce rate-cut bets

Gold prices held steady above the US$4,200 mark on Thursday (Dec 4), buoyed by weak private payrolls data that reinforced expectations of a US interest rate cut at the US Federal Reserve’s monetary policy meeting next week.

Spot gold held its ground at US$4,207.56 per ounce, as at 9.04 am.

US gold futures for December delivery were up 0.1 per cent at US$4,237.50 per ounce.

US private payrolls fell by 32,000 jobs in November, Wednesday’s ADP employment report showed, missing economists’ expectations for a 10,000-job increase.

CME’s FedWatch tool now shows an 89 per cent chance that the US central bank will cut rates next week, while major brokerages also forecast an interest rate cut at the Dec 9 to 10 policy meeting.

Investors are still waiting on the delayed September Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, due on Friday for more insight into the central bank’s monetary policy path.

The US dollar hit a five-week low on Thursday, after weaker-than-expected economic data cemented expectations that the Fed will cut interest rates at its meeting next week.

Lower interest rates tend to favour non-yielding assets such as gold.

Meanwhile, US President Donald Trump said that he plans to announce his pick to replace Jerome Powell as Fed chair early next year.

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SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said that its holdings fell 0.16 per cent to 1,046.58 tonnes on Wednesday, from 1,048.29 tonnes on Tuesday.

Elsewhere, silver fell 0.2 per cent to US$58.39 per ounce, platinum lost 0.8 per cent to US$1,657.70, while palladium slid 0.9 per cent to US$1,446.50. REUTERS

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