Gold rose on dollar weakness as investors focused on U.S. jobs data

Gold rose on dollar weakness as investors focused on U.S. jobs data

Gold rose on Tuesday as the dollar weakened, but gains slowed as some investors took a wait-and-see approach ahead of U.S. payrolls data for August due later this week.

Fundamentals

Spot gold was up 0.2% at $1,814.42 per ounce by 2:01 pm EDT (1801 GMT), after hitting its highest since Aug. 4 on Monday at $1,822.92. U.S. gold futures settled up 0.3% at $1,818.1.

The dollar fell to its lowest level in more than three weeks against a basket of currencies, making gold cheaper for buyers of other currencies.

Interest in gold increased after dovish comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole conference on Friday. Powell did not give a precise timetable for when the Fed would begin to reduce its asset purchases.

“The Fed will pull the trigger, but monetary easing won’t be much reduced in the coming months, so gold should end up doing well,”  said Bart Melek, head of commodity strategies at TD Securities.

Still, investors remain concerned about the timetable for tapering ahead of Friday’s U.S. jobs report, which could fuel fears that the Fed will cut back on its economic support sooner.

Silver fell 0.6% to $23.92 an ounce and was headed for its third straight monthly decline, down about 6%.

Platinum rose 0.8% to $1,014.34, but is on track for its fourth straight monthly decline, down 3.4% so far.

Palladium fell 0.8% to $2,474.66 and is on track for its worst monthly performance since January, down 7%.

Damon Harrison
Market Analyst, IPG Group