Gold was near a more than three-week low on Thursday, dragged by a robust dollar and elevated bond yields, while investors remained cautious ahead of July U.S. nonfarm payrolls data, reports Reuters.
Spot gold was little changed at $1,932.29 per ounce by 09:48 a.m. EDT (1348 GMT), after having hit its lowest since July 11. US gold futures fell 0.3 per cent to $1,968.60.
The dollar rose to a four-week high, making gold more expensive for other currency holders. US 10-year Treasury yields rose to their highest since November.
"There is a lot of focus heading into the jobs numbers tomorrow, especially as we've had some stronger data lately, which has weighed on the sentiment and sort of fuelled the idea that the Fed may have to keep the higher rates for longer," said Ryan McKay, commodity strategist at TD Securities.
Data on Wednesday showed U.S. private payrolls increased more than expected in July, pointing to continued labor market resilience.
Focus is on the US jobs report due on Friday that could influence Federal Reserve's policy stance. The number of Americans filing new claims for unemployment benefits rose slightly last week.
Rising US interest rates increase the opportunity cost of holding non-yielding bullion.
"Gold prices could drift down towards the $1,900 level, but there is probably strong support there as well, just because we are certainly getting towards the end of the hiking cycle," McKay said.
Earlier in the day, the Bank of England raised its key interest rate by a quarter of a percentage point to a 15-year peak.
While investors digested Fitch's downgrade of the U.S. credit rating, independent analyst Ross Norman said gold's failure to rally on that news may be behind redemptions seen in gold exchange-traded funds.
Gold at three-week low as higher dollar, yields dim shine
FE Team | Published: August 03, 2023 23:23:13
Gold at three-week low as higher dollar, yields dim shine
Share if you like