Gold retreats as dollar rises ahead of US jobs data

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Gold prices fell on Wednesday as a stronger dollar dampened the attractiveness of greenback-priced bullion for overseas buyers, while investors awaited the U.S. jobs report to gauge the Federal Reserve’s policy tightening trajectory.

Spot gold was down 0.4% at $1,719.30 an ounce by 0401 GMT. Bullion prices hit their highest level since Sept. 13 at $1,729.39 in the previous session.

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US gold futures fell 0.1% to $1,728.30.

The dollar index edged up 0.2%, after the unit lost 1.3% overnight to mark its biggest drop since March 2020.

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Gold could break above the $1,735 resistance level on weak ADP jobs data, City Index analyst Matt Simpson said, adding that markets are very sensitive to jobs data at the moment. .

The ADP’s national jobs report, due at 12:15 GMT, follows a government survey that showed US job openings fell the most in nearly 2.5 years in August, hinting at a slowdown in the labor market.

This will be followed by the closely watched Nonfarm Payrolls (NFP) data from the US Department of Labor which is expected to be released on Friday.

“If that fails, traders will likely assume a weak NFP on Friday and that could weaken the dollar as traders get more excited about a Fed pivot and likely strengthen gold,” Simpson said.

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US Fed officials recently reiterated their commitment to tackling stubbornly high inflation.

Even though gold is traditionally considered an inflation hedge, rising interest rates in the United States have hurt the appeal of the zero-return precious metal and boosted the dollar. Gold is down 6% for the year so far.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.74 tonnes on Tuesday, marking their second straight day of inflows.

Spot silver slid 1.6% to $20.78 an ounce, platinum fell 0.9% to $921.89 and palladium fell 0.7% to 2,299.24 $. (Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips)

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