Gold slips from 1-month high ahead of US jobs data

Gold slipped yesterday from a one-month high touched in the previous session as traders cut bets on higher prices ahead of US jobs data that will offer clues on the pace of possible US interest rate hikes this year. Spot gold was down 0.4 percent at $1,175.99 per ounce at 1232 GMT.

The metal was still 2.1 percent higher this week, its biggest weekly rise in two months, helped by a recent weakening of the dollar and a retreat in US bond yields. But with markets uncertain ahead of Donald Trump’s inauguration on Jan. 20, investors turned cautious after gold reached its highest since Dec. 5 at $1,184.90 on Thursday.

“Any profit that can be booked at this early stage is welcomed by most, so that’s why we’re seeing a scaling back a bit,” said Saxo Bank analyst Ole Hansen. US gold futures were down 0.4 percent, at $1,176.6 per ounce.

Investors were focused on US nonfarm payrolls data due for release at 1330 GMT, which is expected to show job gains of 178,000 in December. Positive data usually puts pressure on gold prices, as it increases bets on US interest rate hikes that would increase the opportunity cost of holding nonyielding bullion.

“A respectable non-farm payrolls report may not be enough to immediately revive a broad USD uptrend,” said Credit Agricole analysts in a note. “it should help reassure the markets that the fundamental reasoning behind a more hawkish Fed outlook this year largely remains in place.”

The Fed has indicated it will press ahead with further interest rate hikes this year after its second rate increase in a decade last month. Hansen said lower US bond yields and the weaker dollar, which makes gold cheaper for holders of other currencies, had bolstered sentiment.

“If we can manage to hold above $1,162 then the market has the potential of moving up towards testing the really big area of resistance, which is just above $1,200,” he said.

Among other precious metals, spot silver was down 0.1 percent at $16.45, having hit a peak of $16.71, its highest since Dec. 15, in the previous session. Platinum was 0.3 percent lower at $964.7, putting it on track for a gain of 7.2 percent this week. The metal touched a near 8-week high of $975.80 on Thursday.

Palladium was up 0.4 percent at $741.5, after hitting a 4-week high of $747.80 in the previous session. Palladium has risen 9.2 percent this week, its biggest gain since the week ending July 1.