Spot gold gains as investors await U.S. jobs data

January 07, 2025 (MLN): Gold prices rose on Tuesday on a weaker U.S. dollar as traders pondered whether President-elect Donald Trump's tariff plans would be less aggressive than expected.

Investors also awaited U.S. jobs data to gauge the Federal Reserve's interest rate trajectory.

Gold spot prices increased by 0.15% ($4.02) at $2,640.1 per ounce, as of [12:16 pm PST] from the prior day's close of $2,636.1 per ounce.

U.S. gold futures rose 0.3% to $2,655.00.

"Gold prices have managed to stabilize amid some cooling off in the U.S. dollar overnight, but higher U.S. Treasury yields may remain a key overhang for further gains," IG market strategist Yeap Jun Rong said.

The benchmark 10-year Treasury yield hit the highest since May 2024 on Monday, while the dollar hovered near a one-week low, according to Reuters.

The dollar slid against its peers after a media report said that Trump's aides were exploring plans that would apply tariffs only on sectors seen as critical to U.S. national or economic security.

However, Trump denied the report, deepening uncertainty about future U.S. trade policies, Reuters further added.

Bullion is considered a hedge against uncertainty and inflation, but high rates reduce the non-yielding asset's appeal.

Investors are awaiting the U.S. jobs report, due on Friday, which could help shed more light on the Fed's policy path.

U.S. job openings data is also scheduled later in the day, while ADP employment numbers and minutes from the Fed's December meeting are expected on Wednesday.

"The U.S. non-farm payrolls will be the key risk event this week," Yeap said.

"A stable unemployment rate at 4.2% may justify a more gradual rate-cutting process, which could see gold prices consolidate further within its tight range for now," Yeap added.

Last month, the central bank projected fewer rate cuts in 2025, with policymakers expressing concerns over still-high inflation.

Spot silver gained 0.6% to $30.1 per ounce on Tuesday, platinum added 0.6% to $938.5 and palladium ticked up 0.4% to $924.5.

Copyright Mettis Link News