Gold and copper edged lower after a three-day advance as the dollar climbed on poor risk sentiment driven by weak corporate earnings.
European shares and US equity futures declined on Thursday amid the souring mood in the stock market. The greenback snapped three days of declines as investors sought a haven, putting pressure on gold.
US businesses’ payrolls fell last month by the most since the early days of the pandemic, due to the spread of the omicron coronavirus variant, according to ADP Research Institute data. That release came ahead of Friday’s employment report from the Labour Department which will be eyed by traders to gauge the pace of wage inflation.
“The bar is very high for a data miss to derail the Fed’s hiking plans, given its commitment to inflation,” Nicky Shiels, head of metals strategy at MKS PAMP SA, wrote in a note. “Gold needs both softer jobs and weaker inflation prints in order for global central banks to step off the pedal.”
Bullion is holding above $1 800 an ounce as traders price in the prospects of the Federal Reserve raising interest rates in March, while volatility in equities and geopolitical tensions are providing support to the haven asset. Later Thursday are rate decisions by the European Central Bank and the Bank of England.
Spot gold edged 0.1% lower to $1 805.43 an ounce as of 9:35 a.m. in London, after climbing 0.9% in the last three days. The Bloomberg Dollar Spot Index rose 0.2% after dropping 0.2% in the previous session. Silver, platinum and palladium fell. Markets in China remain closed for the Lunar New Year holidays.
Base metals were mixed, with copper down 0.6% to $9 778.50 a ton on the London Metal Exchange. Aluminium rose 0.7%, while nickel fell 0.3%. LME inventories of all three metals declined on Thursday.