Gold slips as focus turns to nonfarm payrolls
Tue June 04 2024
Gold prices inched down on Tuesday after rising 1% in the previous session as investors awaited US jobs data due later this week for clues on the Federal Reserve’s interest rate trajectory.
Spot gold was down 0.2% at $2,345.76/oz by 3.23am GMT. Prices touched their lowest level in nearly a month on Monday before settling 1% higher. US gold futures fell 0.1% to $2,366.00.
Wednesday’s ADP employment report and nonfarm payrolls data due on Friday will be closely watched for further clues on the health of the US labour market and if it will deter the Fed from cutting rates in September.
“If the payrolls data comes above 200,000, which is kind of very rosy, then gold prices might slide further and even break that $2,320 support level,” said Kelvin Wong, a senior market analyst for Asia Pacific at Oanda.
“We do see technical factors that are still positive at least in the near term because it's still being supported at the $2,320 support level, with yesterday's bounce reinforced by weaker-than-expected manufacturing numbers which also caused the yields to fall.”
Data showed US manufacturing activity slowed for a second straight month in May, and construction spending fell unexpectedly for a second consecutive month in April.
The Federal Reserve Bank of New York said on Monday that underlying inflation pressures eased slightly in April.
While bullion is considered an inflation hedge, higher rates increase the opportunity cost of holding the non-yielding asset.
A survey carried out by a think-tank found that global central banks planned to continue to increase their exposure to gold, a trend that has already helped the precious metal hit record highs in 2024.
Spot silver fell 0.5% to $30.62/oz, platinum was up 0.8% at $1,019.05 and palladium gained 0.7% to $923.75.