Gold prices inched lower on Tuesday as investors avoided taking big positions ahead of key U.S. non-farm payroll data due later this week, an important parameter to determine the U.S. Federal Reserve’s future policy stance.
Spot gold fell 0.1% to $1,810.96 per ounce by 0348 GMT, while U.S. gold futures dropped 0.5% to $1,813.40.
“Every data point we get from here until the Jackson Hole symposium will be crucial,” said Kyle Rhoda, an analyst at IG Market.
“There’s a lot of spare capacity in the labor market… If there’s the sense that the Fed will continue to keep policy settings accommodative medium to longer term, that’s a really good dynamic for gold prices, especially if we see inflation expectations remain relatively elevated.”
Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
Fed Chairman Jerome Powell’s remarks last week about interest rate hikes being “ways away” and the job market propelled gold to a two-week peak.
Fed Governor Christopher Waller on Monday said the central bank could start to reduce its support by October if the next two monthly jobs reports each show employment rising by 800,000 to 1 million, as he expects.
