PRECIOUS METALS RETREAT

GOLD PRICES slipped more than 1% yesterday, weighed down by a jump in the dollar and US Treasury yields in the run up to US jobs data that could influence the Federal Reserve’s (Fed) rate hike path.

Spot gold price was down 1.1% at $1 707.41 (about R30 245) an ounce by 5.50pm, after hitting a three-week peak at $1 729.39 an ounce on Tuesday. US gold futures fell 0.8% to $1 716.30 an ounce.

“We’re seeing a resurgence in the dollar and yields, as a result, we’ve seen a pullback in gold after a pretty aggressive move higher over the course of the last several sessions,” said David Meger, director of metals trading at High Ridge Futures.

Making gold less appealing for other currency holders, the dollar gained over 1% against its competitors, after posting its worst day since March 2020 on Tuesday.

Benchmark US 10-year Treasury yields also climbed.

Data showed US private employers stepped up hiring in September, suggesting demand for workers remains strong despite rising interest rates and tighter financial conditions.

Focus now shifts to the US Labour Department’s closely watched nonfarm payrolls data for September, out tomorrow.

“The Fed is very much focused on the jobs market right now. We’ve seen little hints as to slowdown in manufacturing. However, if we do see a better-than-expected jobs number, that may be disappointing to the gold market,” Meger said.

Spot silver dropped 3.7% to $20.33 an ounce, after rising to a three-month peak in the previous session.

“Silver had previously been significantly undervalued vis-Ã-vis gold. Its undervaluation now is no longer so pronounced,” Commerzbank analysts said in a note.

Platinum fell 1.9% to $912.00 an ounce, and palladium dipped 2.8% to $2 252.15 an ounce.