Gold prices hit one-week high as dollar turns lower

Reuters: Gold prices rose to a one-week peak yesterday as the dollar slipped after data showed US wage growth slowed last month, while investors awaited minutes of the US Federal Reserve’s March meeting later this week.

Spot gold gained 0.4% to $ 1,296.06 per ounce by 0605 GMT, having hit a session high of $ 1,296.83 earlier. US gold futures were also up 0.4% at $ 1,300.40 an ounce.

“The dollar index is pulling back from multi-week highs and gold prices are riding this tailwind of softer dollar,” said CMC Markets, Singapore market analyst Margaret Yang.

“Though the non-farm payrolls data was better than expected, the manufacturing jobs fell which is a bad signal for the sector and doesn’t show a very bright picture of the economic outlook.”

The dollar was down 0.2% against key rivals, making bullion cheaper for holders of other currencies.

Though employment growth accelerated from a 17-month low in March, data on Friday showed a slowdown in wage growth and job cuts in the manufacturing sector, the first decline in factory payrolls since July 2017.

The moderation in wage growth supported the Fed’s dovish decision to abandon interest rate increases this year.

The markets are now awaiting the minutes of the Federal Open Market Committee’s (FOMC) March policy meeting, due tomorrow, for cues on the Fed’s future monetary policy stance.

“But ultimately the wildcard remains the US-China trade negotiations,” said SPI Asset Management trading and market strategy head Stephen Innes, adding that the equity markets will spike on news of an agreement, denting the near-term appeal of gold.

US and Chinese negotiators are scheduled to resume discussions this week to try to secure a pact to end the year-long tit-for-tat tariff battle.

Asian shares rose to seven-month highs as investors cheered a rebound in US payrolls and hints of more stimulus in China, capping gold’s gains.

A rally in equity markets has led investors to cut their exposure to gold recently, analysts said.

Speculators slashed their bullish wagers in COMEX gold in the week to 2 April, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Holding’s in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, also fell as much as 3% in the previous week, its biggest weekly percentage decline since end-November 2016.

Among other precious metals, spot platinum was last up 1.4% at $ 907.15 an ounce, after touching its more-than-10-month high of $ 912.90 earlier in the session.

Palladium rose 0.2% to $ 1,372.61 and silver gained 0.3% to $ 15.12.