Gold prices rose in early Asian trading on Thursday, following their biggest daily gain since mid-August in the previous session, supported by a weaker US dollar as investors awaited the US nonfarm payrolls report due later this week for clues about the Federal Reserve’s interest rate outlook.
Spot gold climbed 0.6% to $4,082.76 per ounce, after gaining approximately 3.4% on Wednesday. US gold futures for December delivery also advanced 0.5% to $4,092.90 per ounce.
The dollar weakened on Wednesday after the Democrats’ sweeping victory in the US midterm elections removed one source of market uncertainty, while investors continued assessing the possibility of regulatory changes.
A weaker dollar makes dollar-denominated gold more attractive to holders of other currencies.
A report released on Wednesday by ADP Research showed that private-sector employment growth in the United States continued to accelerate in October.
Investors are now awaiting Friday’s US nonfarm payrolls report to gain a clearer picture of the Federal Reserve’s monetary policy outlook.
According to CME Group’s FedWatch tool, traders currently assign an 83% probability to the US central bank raising interest rates in December.
Higher interest rates generally increase the opportunity cost of holding non-yielding precious metals, reducing their appeal to investors.
Among other precious metals, spot silver rose 0.3% to $52.37 per ounce, while platinum gained 0.6% to $1,505.85. Palladium slipped 0.1% to $1,003.83 per ounce.
Source: Reuters
