Gold hits three-week peak after weaker US jobs data

By Brijesh Patel

(Reuters) – Gold climbed to a three-week peak on Tuesday as the dollar and Treasury yields slipped after weaker labour market readings cast doubts over the chances of another rate hike by the Federal Reserve.

Spot gold was up 0.9% at $1,936.84 per ounce as of 1:55 p.m. EDT (1754 GMT). U.S. gold futures settled 0.9% higher at $1,965.10.

The dollar fell against its rivals, reversing earlier gains, after data showed that U.S. job openings fell in July. The benchmark 10-year Treasury yields also ticked lower. [USD/] [US/]

The downbeat Job Openings and Labor Turnover Survey (JOLTS)and consumer confidence reports suggest the Fed may not raise rates as much as previously anticipated, and that’s helping gold along with some short-covering, said Jim Wyckoff, senior market analyst at Kitco.

Investors now await the U.S. personal consumption expenditures price index due on Thursday and nonfarm payrolls on Friday for further clues on the interest rate trajectory.

According to the CME FedWatch tool, traders now see an 86% chance of the Fed leaving rates unchanged at its September meeting, up from 78% before the data.

Higher interest rates increase the opportunity cost of holding non-yielding bullion.

Reflecting sentiment, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.3% on Monday. [GOL/ETF]

“The fact that the price has been recovering since the middle of last week suggests that the selling pressure exerted by speculative financial investors has abated,” Commerzbank analyst Carsten Fritsch wrote in a note.

Silver rose 1.9% to $24.71 per ounce. Platinum gained 1.5% to $978.45, its highest in a month. Palladium slipped 0.6% to $1,247.35.

(Reporting by Brijesh Patel and Harshit Verma in Bengaluru; Editing by Shilpi Majumdar)