Gold falls on dollar strength as traders await US employment data

Gold fell this Wednesday, pressured by the strength of the dollar and the rise in the yields of Treasury bonds, in the period before the report of the labor market of the United States that will be released at the end of the week and that could be key to the Fed’s stimulus phasing schedule.

Spot gold was down 0.2% to $ 1,756.30 an ounce at 1126 GMT, while US gold futures were down 0.5% to $ 1,752.90 an ounce.

Some investors flocked to buy dollars, which competes with gold as a safe haven asset, to hedge against concerns about rising energy prices that could exacerbate inflation and cause a slower pace of economic growth. .

A stronger dollar also affects the attractiveness of bullion to foreign buyers. Yields on 10-year US Treasuries were also up.

Xiao Fu, head of commodity markets strategy at Bank of China International, said that even if the US nonfarm payroll data is not “spectacular and in line with expectations,” some Fed members already believe that the conditions for the stimulus cut have been met, a factor pushing gold lower.

Market expectations point to the creation of 488,000 jobs nationwide in September, enough to keep the central bank on track and begin tapering before the end of the year.

Therefore, the markets are not willing to take a decisive step before the employment report, since “they are gradually incorporating greater prospects of the withdrawal of stimulus from the Fed, which are boosting the dollar and real US yields” said Han Tan, chief market analyst at Exinity.

Among other precious metals, silver fell 1.4% to US $ 22.35 per ounce; while platinum lost 0.8% to US $ 954 an ounce; and palladium fell 1.6% to US $ 1,883.69 an ounce.