Gold prices were caught in a tight range on Tuesday as investors held back from making large bets ahead of U.S. jobs data later this week expected to shed more light on labor market health and the Federal Reserve’s tapering timeline.
Spot gold slipped 0.2% to $1,810.40 per ounce by 0859 GMT, while U.S. gold futures fell 0.4% to $1,814.10.
“The upcoming U.S. non-farm payrolls print could dictate gold’s next major move, depending on how the economic data informs market participants over the Fed’s policy outlook,” Han Tan, chief market analyst at Exinity said.
July’s U.S. non-farm payroll numbers, due on Friday, are the last major jobs report before global central bank officials hold their annual meeting in Jackson Hole in late August. Economists in a Reuters poll forecast a 926,000 job increase.
Fed Governor Christopher Waller on Monday said the central bank could start to reduce its support by October if the next two monthly jobs reports each show employment rising by 800,000 to 1 million, as he expects.
As such, gold’s ascent has been limited by the looming prospects of the Fed’s tapering, Exinity’s Tan said, adding, “safe haven asset has been supported by persistent concerns over the downside risks that the Delta variant poses”.
Higher interest rates make non-yielding gold less attractive.
However, worries over the global spread of the Delta variant of the coronavirus kept European stocks under pressure and offered some respite to safe-haven assets like gold.
Despite lower yields and a weaker dollar, gold prices are still struggling to advance, leaving the market nervous, said Saxo Bank analyst Ole Hansen.
Elsewhere, silver fell 0.2% to $25.37 per ounce, platinum shed 0.6% to $1,050.50 per ounce, and palladium rose 0.2% to $2,680.21.