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PRECIOUS-Gold listless as investors seek direction from U.S. jobs data

reuters.com · 09/01/2021 00:03
PRECIOUS-Gold listless as investors seek direction from U.S. jobs data

SPDR Gold ETF holdings slide 1.5 tonnes on Tuesday

Dollar hovers close to a more than three-week low

Recasts, adds comment, updates prices

By Eileen Soreng

- Gold prices were little changed on Wednesday as investors awaited a key U.S. jobs report for clues on when the Federal Reserve might start reducing its pandemic-era stimulus measures.

Spot gold XAU= was steady at $1,814.01 per ounce by 0343 GMT, while U.S. gold futures GCv1 eased 0.1% to $1,816.00.

The dollar index =USD clawed 0.1% higher, but hovered closer to a more than three-week low hit on Tuesday. USD/

"A print above 1 million jobs will put the taper back front and centre and be bearish for gold. Whereas a number around 700,000, or lower, will alleviate those concerns and be supportive of gold," said Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA.

Gold "lacks the momentum to trade meaningfully away from the 100 and 200-day moving average zone," he added.

Economists polled by Reuters see nonfarm payrolls increased by 750,000 in August.

A strong recovery in the labour market is a crucial prerequisite for Fed's decision on tapering.

Last week, Fed Chair Jerome Powell acknowledged in his remarks at the Jackson Hole symposium that tapering could begin this year, but it will remain cautious in its decision to raise interest rates. nL1N2PY1FI

His comments were deemed dovish and sent gold up 1.4% on Friday.

While gold is considered a hedge against inflation and currency debasement, caused by massive stimulus measures, lower interest rates also reduce the opportunity cost of holding non-yielding bullion.

"The lack of follow through in gold (after Jackson Hole symposium) is very telling of the fact that the market recognises that the direction for policy is now starting to wind back stimulus," said DailyFX currency strategist Ilya Spivak.

Indicative of sentiment, holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, fell 0.2% to 1,000.26 tonnes on Tuesday, its lowest level since April 2020. GOL/ETF

Silver XAG= fell 0.2% to $23.85 per ounce, while platinum XPT= eased 0.3% to $1,009.88. Palladium XPD= rose 0.3% to $2,475.25.

(Reporting by Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu and Shounak Dasgupta)

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