Gold retreats on firm dollar, US payrolls data on tap

Gold was subdued on Thursday (May 1) on the US dollar’s strength, while investors awaited more clarity on trade policy between the US and its trading partners, and looked forward to the US non-farm payrolls report due this week.

Spot gold fell 0.7 per cent to US$3,265.45 an ounce, as at 0022 GMT. US gold futures lost 1.4 per cent to US$3,273.70.

The US dollar index, which measures the US currency against a basket of others, rose 0.2 per cent, making gold less attractive for other currency holders.

Trump administration expects to conclude initial tariff deals with some US trading partners within weeks, but negotiations with India are not “finish-line close” and no official talks with China are underway, US Trade Representative Jamieson Greer said on Wednesday.

Meanwhile, the US economy contracted for the first time in three years in the first quarter, as businesses rushed to import goods ahead of expected tariffs from the Trump administration.

The market now awaits non-farm payrolls report on Friday for more cues on the Fed’s monetary policy path. The report is expected to show a slowdown in hiring but no change in the 4.2 per cent unemployment rate.

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Non-yielding gold, considered a hedge against global uncertainty and inflation and tends to thrive in a low-interest-rate environment, soared to a record high of US$3,500.05 per ounce on Apr 22.

Analysts in a quarterly Reuters poll have forecast an average annual gold price above US$3,000 for the first time, with global trade friction and a swing away from the US dollar powering demand.

China’s stock and bond markets, foreign exchange and commodity futures markets will be closed from May 1 until May 5 for the Chinese Labour Day holiday.

Spot silver rose 0.1 per cent to US$32.63 an ounce, platinum fell 0.1 per cent to US$965.32 and palladium firmed 0.1 per cent to US$938.85. REUTERS