GOLD prices eased on Monday (Oct 7) as bets firmed for a smaller US rate cut after a surprisingly strong jobs report, while market participants awaited inflation data and comments from Federal Reserve officials for further cues.
Spot gold slipped 0.1 per cent to US$2,650.79 per ounce, as at 0030 GMT. US gold futures rose 0.1 per cent to US$2,670.20.
Gold prices fell on Friday after a stronger-than-expected US jobs report poured cold water on expectations for an aggressive Fed rate cut next month, boosting the US dollar.
Data showed that US job gains increased by the most in six months in September and the unemployment rate fell to 4.1 per cent, pointing to a resilient economy.
Traders now see a 95 per cent probability that the Fed will cut rates by only a quarter percentage point in November, according to CME’s FedWatch tool. They have scaled back expectations for a 50 basis-point cut to 0 per cent from 28 per cent.
Chicago Fed president Austan Goolsbee called the latest US jobs report “superb” and said more labour market data along those lines would boost his confidence that the economy is at full employment with low inflation.
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Gold tends to be a preferred investment in a low interest rate environment and during political and economic unrest.
This week, market participants will focus on minutes of the Fed’s last policy meeting, and US Consumer Price Index (CPI) and Producer Price Index (PPI) data. A slew of US central bank officials are also speaking this week.
Israel bombed Hezbollah targets in Lebanon and the Gaza Strip on Sunday ahead of the one-year anniversary of the Oct 7 attacks that sparked its war, as Israel’s defence minister declared all options were open for retaliation against arch-enemy Iran.
Spot silver rose 0.3 per cent to US$32.26 per ounce. Platinum gained 0.2 per cent to US$989.92 and palladium rose 1.1 per cent to US$1,022.92. REUTERS
