GOLD prices were flat on Wednesday (Oct 2), as the US dollar held firm and market participants looked ahead to upcoming US data for insights into possible interest rate cuts later this year.
Spot gold edged 0.2 per cent lower to US$2,658.07 per ounce, as at 0036 GMT. Bullion hit a record high level of US$2,685.42 on Thursday.
US gold futures were down 0.4 per cent to US$2,679.10.
The US dollar held to its sharpest gain in a week. A stronger US dollar makes greenback-priced bullion more expensive for other currency holders.
Data on Tuesday showed that US job openings unexpectedly rose in August after two months of decline. However, hiring remained weak, indicating a slowing labour market that may lead the Federal Reserve to cut interest rates again in November.
Currently, traders see a 63 per cent chance of a 25-basis-point (bp) cut in November and a 37 per cent chance of a 25-bp cut, per CME FedWatch Tool.
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Lower interest rates reduce the opportunity cost of holding gold, which is also viewed as a safe asset during economic and political turmoil.
On the geopolitical front, Iran said early on Wednesday that its missile attack on Israel was finished barring further provocation, while Israel and the US promised to retaliate against Tehran’s escalation as fears of a wider war intensified.
Markets will be cautious ahead of ADP employment data and remarks from several Fed officials due later in the day, which might provide hints regarding Fed rate-cut cycle.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.33 per cent to 874.82 tonnes on Tuesday.
Meanwhile, physical demand for gold across key markets has tumbled as prices continue to rise, with some retail consumers opting to sell their holdings and book the profit, industry players and analysts said.
Spot silver fell 0.3 per cent to US$31.31 per ounce, platinum gained 0.4 per cent to US$989.49 and palladium rose 0.61 per cent to US$1,000.75. REUTERS
