Gold prices edge higher; rate jitters limit gains after US data

Gold prices edged higher Wednesday, but gains are limited following a rebound in the dollar as traders continued to fret over the prospect of slower monetary easing in 2025.

At 09:25 ET (14:25 GMT), spot gold climbed 0.5% to $2,662.42 an ounce, while gold futures expiring in February rose 0.4% to $2,677.01 an ounce.  Gold prices pressured by US rate jitters 

Data released earlier Wednesday showed that the number of Americans filing for first-time unemployment benefits unexpectedly edged down last week, touching the lowest level since February, in a sign of strength in the labor market.

This added to stronger-than-expected job openings data pointed to sustained strength in the labor market, which furthered expectations of slower rate cuts, especially amid growing signs that the labor market remained robust. 

The reading comes just days before key nonfarm payrolls data for December, which is set to offer more definitive cues on the labor market this week. 

Sticky inflation and strength in the labor market are expected to give the Federal Reserve less impetus to cut interest rates, with the bank having warned as much during its December meeting. 

Hawkish comments from Fed officials reiterated this notion earlier in the week. 

Higher for longer rates bode poorly for gold and metal markets, given that they increase the opportunity cost of investing in non-yielding assets. 

That said, gold has seen demand from China’s central bank, which added to its gold reserves for a second month in December.

Gold held by the People’s Bank of China rose to 73.29 million troy ounces in December, from 72.96 million in the previous month. The central bank resumed adding to its gold reserves in November after a six-month pause. The purchase by the central bank comes even with gold prices near record levels.

Other precious metals were also higher on Wednesday. Platinum futures rose 0.5% to $981.30 an ounce, while silver futures climbed 0.8% to $30.942 an ounce.  Copper price advance with China inflation in focus 

Among industrial metals, copper prices rose slightly, with focus turning to more economic cues from top importer China, due later in the week.

Benchmark copper futures on the London Metal Exchange rose 0.4% to $9,017.50 a ton, while March copper futures rose 0.8% to $4.2302 a pound. 

China is set to release inflation figures for December on Thursday, offering up more economic cues on the country as Beijing struggles to shore up growth.

The government is expected to ramp up fiscal spending this year to support the economy, especially in the face of trade-related headwinds from a Trump administration.

(Ambar Warrick contributed to this article.)

 

 

Source: Investing.com