Gold prices hovered in a narrow range early Thursday as market participants stayed cautious, waiting for key U.S. economic reports that could shed light on the Federal Reserve’s next interest rate moves.
As of 09:00 GMT, spot gold remained stable at $2,645.00 per ounce, just shy of its record high of $2,685.42 from late September. U.S. gold futures edged higher by 0.2% to $2,663.50.
“Gold is consolidating now, but all signs point to a possible retest of the all-time high in the coming weeks,” said Brian Lan, managing director at GoldSilver Central. “The technical charts indicate persistent upward momentum.”
The key drivers in the immediate term include the release of the ISM services data and initial jobless claims, expected later today, as well as the crucial U.S. non-farm payrolls report due on Friday. Analysts predict these reports could offer further clues on the Federal Reserve’s monetary policy, especially as the markets adjust their expectations regarding rate cuts.
Recent data has shown surprising strength in the U.S. labor market, with private payrolls growing more than anticipated in September. This has slightly tempered market sentiment around aggressive interest rate cuts, with the odds of a 50-basis-point cut at the Fed’s November meeting dropping to 36%, down from 57% last week, according to CME’s FedWatch Tool.
Gold, which typically performs well in low-interest-rate environments, continues to be a preferred asset for investors seeking refuge amid uncertainty. However, some of the focus has recently shifted to oil due to the energy sector’s robust performance.
“Tensions in the Middle East and the upcoming U.S. elections will provide long-term support for gold,” Lan said. “In the short-term, however, we might see some investment flows moving toward oil.”
Geopolitical instability remains a critical factor for bullion prices. Israel’s airstrikes on Beirut on Wednesday, which killed at least six people, marked a deadly escalation in its ongoing conflict with Hezbollah.
On the demand front, Perth Mint’s gold sales surged to a 10-month high in September, with strong interest in silver products as well, pushing silver sales to a seven-month high.
Among other precious metals, spot silver declined 1.13% to $31.45 per ounce, platinum dipped 0.5% to $997.90, and palladium dropped 2.72% to $988.
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