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PRECIOUS-Gold eases on firm dollar, hawkish Fed official

Category: Economy

Date: 2021-08-05T07:37:11+0000
PRECIOUS-Gold eases on firm dollar, hawkish Fed official

Shafaq News/ Gold prices eased on Thursday as the dollar held firm after remarks from a top U.S. Federal Reserve official signaled the possibility of bringing forward policy tightening.

Spot gold fell 0.1% to $1,809.96 per ounce by 0255 GMT, while U.S. gold futures were down 0.1% at $1,812.80.

Asia Pacific investors are trying to strike a balance between weak payrolls data and hawkish comments from Fed officials, putting the spotlight over Friday’s non-farm payroll data, said Margaret Yang, a strategist at DailyFX.

Bullion prices rose more than 1% in the previous session after the ADP National Employment Report showed U.S. private payrolls increased far less than expected in July. However, that data was offset by strongest ever reading for U.S. services.

Gold pared most overnight gains following Fed Vice Chair Richard Clarida’s remarks that conditions for raising interest rates could be met by the end of 2022.

Clarida also suggested the central bank could start cutting back on its asset purchase program later this year.

Higher interest rates raise the opportunity cost of holding non-interest bearing gold.

The dollar index firmed on the hawkish comments, making gold more expensive for holders of other currencies.

“For gold to breach the $1,835 (resistance level), some catalysts could be a much poorer than expected non-farm payrolls... Another is a rapid flare up of Delta variant in the United States which could lead to lockdowns and social distancing,” Yang added.

Coronavirus cases worldwide surpassed 200 million on Wednesday, with the United States accounting for one in every seven global infections, according to a Reuters tally.

Elsewhere, silver was little changed at $25.34 per ounce, having hit a near three-week peak on Wednesday.

Platinum earlier hit an over seven-month low of $1,005.50 and was last down 1.5% at $1,010.51.

Palladium eased 0.1% to $2,644.58.

Source: Reuters

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