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Gold down on stronger dollar; focus on U.S. jobs data
Highlights
Gold edged lower on Tuesday as the dollar and European shares rose ahead of U.S. nonfarm payrolls later in the week that could give clues on when the Federal Reserve will hike interest rates.
Gold edged lower on Tuesday as the dollar and European shares rose ahead of U.S. nonfarm payrolls later in the week that could give clues on when the Federal Reserve will hike interest rates.
Spot gold was down 0.1 percent at $1,187.03 an ounce by 0956 GMT, while U.S. gold futures for June delivery were unchanged at $1,186.80 an ounce.
The dollar was up 0.4 percent against a basket of major currencies, while European shares rose 0.6 percent.
Gold fell to a six-week low of $1,170 on Friday after the Federal Reserve indicated that it saw a recent slowdown in the U.S. economy as transitory and did not rule out an interest rate rise this year.
"U.S. data will continue to be very important - if it's good, we will eventually get lower gold prices," Natixis analyst Bernard Dahdah said.
However, with a rate hike now likely in September rather than June, gold prices will probably remain in the current range for longer and will not drop as quickly as previously thought, Dahdah added.
Speculation over the timing of a rate hike has kept markets on edge.
Doubts still persist over the robustness of the U.S. economy as recent data has been mixed, with many traders pushing expectations of a rate hike from June to later this year.
Strong data could prompt the Fed to raise interest rates soon, a move seen by investors as denting demand for bullion, which does not pay interest.
Chicago Fed President Charles Evans provided no clarity on the issue on Monday. He said rate hikes could begin this year, although with inflation uncomfortably low and the unemployment rate still too high, he said the U.S. central bank should hold off on raising rates until early next year.
An early rate hike this year is not as unlikely as markets believe, said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
"Gold prices are going to move around $1,200 because of the uncertainty over the timing. The dominant factors influencing gold are interest rates and monetary policy," he said.
Silver was down 0.1 percent at $16.38 an ounce after climbing to a four-week high on Monday. Platinum fell 0.3 percent to $1,142 an ounce, while palladium lost 0.2 percent to $778.10 an ounce.
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