Gold seesawed within a narrow range on Tuesday on the back of a steady dollar, as investors waited for cues on the timing of US interest rate hike from non-farm payrolls data, due later this week.
“Gold remains range-bound within a descending triangle over the past month, with price action likely to remain fairly stable while inside this,” Alex Thorndike, senior precious metals dealer with MKS PAMP Group, said in a note.
“Prices will need to either breach the next major support at $1309-11 (July lows in gold) or $1334.80 (50-day moving average) and $1355 (two-month downtrend line) to the topside to garner more interest.”
Spot gold slipped 0.2 per cent at $1,320.79 per ounce at 0624 GMT.
The metal had recovered from a near five-week low of $1,314.70 after a dollar run lost some steam late Monday.
US gold futures was down 0.2 per cent at $1,324.80.
“While we have seen some outflows from exchange-traded funds, investors are relatively happy to hold gold, considering the environment of low-interest rates and negative yield,” said ANZ analyst Daniel Hynes.
Yellen’s statement
Federal Reserve Chair Janet Yellen had said on Friday the case for “an increase” in the policy rate has strengthened in the recent months due to improvements in the labour market and expectations for solid economic growth.
Friday’s non-farm report for August, as well as other data, could reinforce hawkish messages from Yellen and other Fed officials.
Non-farm payrolls data
Employers are expected on Friday to show 180,000 job gains in August, according to a Reuters poll, below the better-than-expected 255,000 additions in July and 292,000 gains in June.
“Gold may be especially sensitive to that (jobs data) release should the data be seen as likely to influence the timing of a future interest rate hike,” HSBC analyst James Steel said in a note.
“Other upcoming data will detail personal consumption, consumer confidence, car sales, and factory activity, and may also influence gold.”
US consumer spending
US consumer spending increased for a fourth straight month in July amid strong demand for automobiles, pointing to a pick-up in economic growth that could pave the way for the Fed to raise interest rates this year.
Gold is highly sensitive to the rising US interest rates, which increases the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
The dollar index, which tracks the greenback against a basket of six rivals, was up 0.2 per cent at 95.785.
Silver dropped 0.6 per cent to $18.72 an ounce. It hit a two-month low of $18.36 in the previous session.
Platinum edged up 0.2 percent at $1,077, while palladium climbed 0.5 per cent to $699.20.