Gold prices gained on Thursday, helped by a weaker dollar, while investors braced for U.S. jobs data that could influence the Federal Reserve’s policy trajectory.
Spot gold last rose by 0.41% to $1,925.2703 per ounce, while U.S. gold futures gained 0.25% to $1,932.00.
The dollar fell 0.4% against its rivals, making bullion cheaper for overseas buyers. Capping gold’s upside, benchmark yields hit a four-month high.
Gold could head lower near term as there has not yet been the “combination of economic data which is going to get enough policymakers at the Federal Board to maintain the pause”, said Craig Erlam, senior markets analyst at OANDA.
On the radar on Thursday, initial unemployment benefit claims are forecast to have risen for the week ended July 1, while initial data on the ADP National Employment report showed employment likely increased in June. The Job Openings and Labor Turnover Survey (JOLTS) is also due.
“A strong jobs report would mean that a rate hike this month is basically nailed on and September looks pretty secure too... the $1,900 price level could come under pressure,” Erlam said.
FOMC June meeting minutes on Wednesday showed that almost all Fed participants judged it appropriate to maintain the federal funds rate at the existing 5%-5.25%.
Investors see an 89% chance of a 25-basis-point hike this month, with cuts expected in July, CME’s Fedwatch tool showed.
Rising rates increase the opportunity cost of holding non-yielding bullion.