Gold prices edged lower in a choppy session on Wednesday due to a slight uptick in the dollar, while investors looked forward to more economic data to gauge the U.S. Federal Reserve’s rate-hike strategy.
Spot gold was down 0.1% at $1,872.44 per ounce by 10:27 a.m. ET (1527 GMT).
U.S. gold futures rose 0.4% to $1,871.10.
The dollar rose 0.1% against its rivals, making gold more expensive for other currency holders.
“The main focal point here has been the shift in sentiment after the jobs report. There were high expectations that (Fed chief) Jerome Powell would take advantage of the opportunity to jawbone the market down a bit, but he did not,” said David Meger, director of metals trading at High Ridge Futures.
“We continue to see gold prices to be range bound here. There is some fairly strong support in the $1,850 to $1,870 range. We think dips are going to remain a buying opportunity in the short term.”
Powell on Tuesday said interest rates might need to move higher than expected if the U.S. economy remained strong, but reiterated he felt a process of “disinflation” is underway. New York Fed President John Williams on Wednesday said his expectations of future central bank rate cuts is driven mostly by a need to respond to the likelihood of lower levels of inflation in the future.
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion.
Following a robust U.S. jobs report, market participants now await January inflation numbers next week that could offer more cues on the Fed’s rate-hike path.
“One factor that could well be keeping the gold price so supported is the strength of buying from central banks, including those in China, India and Turkey,” Kinesis Money analyst Rupert Rowling said in a note.
Spot silver rose 0.8% to $22.36, platinum climbed 0.5% to $978.11, while palladium slipped 0.5% to $1,637.55. (Reporting by Brijesh Patel in Bengaluru; Editing by Shailesh Kuber)