By Hissay Ongmu Bhutia
(Reuters) – Gold prices rebounded from a two-week low on Thursday, as a pullback in the dollar lifted demand among investors who are looking ahead to a U.S. jobs report that could shed more light on the Federal Reserve’s next move on interest rates.
Spot gold was up 0.3% at $2,046.70 per ounce as of 1006 GMT, after hitting its lowest since Dec. 21 on Wednesday. U.S. gold futures rose 0.6% to $2,054.50 per ounce.
“A weaker dollar and slightly lower U.S. rates are lifting gold. It seems like the market participants took the Fed minutes as slightly more dovish,” said Giovanni Staunovo, analyst at UBS.
“We expect with the Fed implementing several rates cuts this year, this should bring back financial investors via ETF and bar demand and lift the price of gold to $2,250 per ounce by the end of the year,” Staunovo added.
The dollar slipped 0.2% against its rivals after hitting a three-week high in the last session, making gold more attractive for other currency holders. [USD/]
Minutes of the Fed’s Dec. 12-13 meeting released on Wednesday showed a growing sense among policymakers that inflation was under control and were concerned about the risks of the central bank’s “overly restrictive” monetary policy on the economy.
Traders are pricing in about a 66% chance of a 25-basis-point rate cut from the Fed at its March 20 policy meeting, according to the CME FedWatch tool.
Lower rates decrease the opportunity cost of holding non-yielding bullion.
Investors now await the U.S. weekly jobless claims data due at 1330 GMT and the non-farm payrolls report on Friday for further clues on the Fed rate hike path.
Data on Wednesday showed U.S. job openings fell to a nearly three-year low in November as the labor market cools.
Spot silver rose 0.1% to $22.9919 per ounce, while platinum was up at $971.15. Palladium rose 0.3% to $1,069.03 per ounce.
(Reporting by Hissay Ongmu Bhutia in Bengaluru; Editing by Krishna Chandra Eluri)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.