- March 8, 2019
- Posted in Africa
Gold range-bound today as investors awaited the U.S. jobs report for further cues on the economy, after the European Central Bank’s (ECB) dovish policy stance spurred the dollar against the euro, while the metal was on track for a second straight weekly decline.
Spot gold was up 0.1 percent at $1,286.91 per ounce as of 0408 GMT. The metal, earlier this week, hit an over five-week low and was down about 0.5 pct so far for the week.
U.S. gold futures were also up 0.1 percent at $1,287.60 an ounce.
The dollar was holding near its new 2019 high posted in the previous session after the ECB postponed an interest rate hike until 2020 and offered banks a fresh round of loans to prevent a credit crunch that could worsen the European Union’s economic slowdown.
“ECB decision echoed U.S. dollar strength, and we saw risk aversion and, while the dollar rose U.S. bond yields fell on safe-haven demand so, there was a bit of a conflict,” said Ilya Spivak, a senior currency strategist at DailyFX.
While falling yields make the non-yielding bullion more attractive, stronger dollar makes it costlier for investors with other currencies.
The ECB announcement compounded worries of a global slowdown, helping bolster the overall sentiment for bullion, considered a safe store of value during times of economic or political turmoil.
Market participants are now waiting for the U.S. non-farm payroll report due later in the day for indications on the strength of the economy and how it would affect the Federal Reserve’s monetary policy.
“The market is very reluctant to commit to a direction especially on something that is going to shape the outlook on the Fed rates and dollar,” Spivak said.
Asian stocks also shuddered lower after the ECB slashed its growth forecasts, leaving investors fearing the worst for the global economy.
Meanwhile, U.S. President Donald Trump on Wednesday said that trade talks with China were moving along well and predicted either a “good deal” or no deal.
“Strong non-farm payrolls results and further positive developments in U.S.-China trade talks are likely to drive gold down to $1,250/oz, which remains a key support level for gold,” OCBC Bank analysts said in a note.
Platinum was flat at $813.50 per ounce, after touching its lowest since Feb. 19 at $806.50 earlier in the session. _Reuters