Gold steady as rising yields offset dollar weakness; PCE data eyed

Gold prices held steady on Friday (Dec 5), as rising US Treasury yields offset support from a weaker US dollar, while markets awaited US inflation data later in the day for clues into the Federal Reserve’s policy outlook ahead of its meeting next week.

Spot gold fell 0.1 per cent to US$4,203.89 per ounce as at 8.47 am.

US gold futures for December delivery lost 0.2 per cent to US$4,233.60 per ounce.

Benchmark 10-year US Treasury yields dipped but held at a more than two-week high, while the US dollar rose but held near one-month lows.

On Thursday, data showed new US unemployment benefit claims dropped to 191,000 last week, the lowest in more than three years and well below economists’ estimate of 220,000.

Meanwhile, the ADP report on Wednesday indicated US private payrolls declined by 32,000 in November, marking the steepest drop in more than two and a half years.

A majority of more than 100 economists polled by Reuters forecast the Fed will reduce its key interest rate by 25 basis points at its Dec 9 to 10 meeting, as the central bank seeks to support a cooling labour market.

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

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

SEE ALSO

Elsewhere, silver fell 0.2 per cent to US$57.02 per ounce, platinum lost 0.6 per cent to US$1,636.0, while palladium slid 0.2 per cent to US$1,445.87. REUTERS

Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.