Gold gains as US dollar, yields slip; focus on jobs data

(Reuters) – Gold firmed on Thursday as the U.S. dollar and Treasury yields retreated on raised bets that the Federal Reserve may be done raising interest rates, while investors awaited U.S. non-farm payrolls data for further cues.

Spot gold was up 0.2% at $1,985.69 per ounce by 3 p.m. EDT (1900 GMT). U.S. gold futures settled 0.3% higher at $1,993.50.

Helping bullion’s appeal, the dollar index slipped 0.7%, and benchmark U.S. 10-year note yields fell to a near three-week low. [USD/] [US/]

Gold is supported as there are signs of cracks in the U.S. labor market, which probably signals the Fed is backing off completely from rate hikes, said Bob Haberkorn, senior market strategist at RJO Futures.

Data showed U.S. weekly jobless claims rose moderately as the labor market continued to show few signs of a significant slowdown.

The Fed held rates steady on Wednesday as policymakers considered whether financial conditions may be sufficiently tight to control inflation.

The market now sees an 80% chance of another Fed pause in December, according to the CME FedWatch Tool.

Investors will also monitor the U.S. non-farm payrolls report due on Friday for further cues on the U.S. central bank’s policy path.

Higher interest rates raise the opportunity cost of holding bullion.

Gold rose over 7% in October and surpassed the key $2,000-per-ounce level last week on safe-haven demand amid growing unrest in the Middle East.

“Gold already prices in the geo-political risks. If the war expands, then prices would benefit more,” Haberkorn added.

Spot silver fell 0.9% to $22.77 per ounce, while platinum added 0.2% to $922.11.

Palladium gained 0.8% to $1,110.75 but was down nearly 40% for the year so far.

Shares of Johannesburg-based precious metals producer Sibanye Stillwater fell more than 3% after the company said it was considering further changes at its U.S. palladium mines to adjust the operations to metal prices that have dropped faster than anticipated.