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Futures & Commodities

Gold eases as dollar firms after US job market data

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Gold eased on Thursday, touching a near ten-week low earlier in the session and pressured by a firm dollar on the back of gold-positive U.S. jobs data, while investors awaited clarity on the U.S.-China trade talks.

Spot gold was down 0.2 percent at $1,287.56 an ounce, having earlier touched its lowest since Jan. 25 at $1,280.59. U.S. gold futures settled $1.00 lower at $1,294.30.

"Even though we had a favorable backdrop being created by a more dovish U.S. Federal Reserve, gold is following the dollar, real yields and equities very closely at the moment and the strength in the dollar is weighing on gold in the near term," said Suki Cooper, precious metals analyst at Standard Chartered Bank.

Lower U.S. interest rates tend to pressure the greenback, making dollar-denominated gold less expensive for holders of other currencies.

"But still, the broader backdrop is supportive for gold and we expect the dollar to weaken more in the second half of the year," Cooper added.

The dollar was up 0.2 percent against a basket of currencies , making gold more expensive for holders of other currencies.

The number of Americans filing applications for unemployment benefits dropped to a more than 49-year low last week, pointing to sustained labor market strength despite slowing economic growth.

Analysts now await the closely-watched U.S. non-farm payrolls data on Friday for further clues on the strength of the American economy.

Investors are also watching developments in the U.S.-China trade conflict, with U.S. President Donald Trump expected to announce a date for a summit with China's President Xi Jinping.

"There is a lot of optimism around the idea that we will see a peaceful resolution and some agreement really soon," said Michael McCarthy, chief market strategist at CMC Markets.

Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell for a third straight session on Wednesday. Holdings were at their lowest since Dec. 17 at 24.57 million ounces.

Among other precious metals, spot platinum was last up 2.6 percent at $897.64 an ounce, having earlier hit its highest since mid-June at $898.12 an ounce.

The auto-catalyst metal jumped 3.4 percent in the previous session, the most in more than two years.

Platinum is gaining because of a combination of momentum after breaking the recent highs as well as its relative value against gold and palladium, said Saxo Bank analyst Ole Hansen.

Palladium was down 2.8 percent at $1,365.20 and silver fell 0.4 percent to $15.08.