Gold snaps three-day decline as investors weigh Fed rate outlook
New York (May 5) Gold snapped a three-day losing run as investors assessed the outlook for US interest rates before monthly payrolls data Friday.
Bullion for immediate delivery advanced as much as 0.3% at $1 283.44 an ounce and traded at $1 280.10 at 2:48pm in Singapore, according to Bloomberg generic pricing. Prices retreated in the past three days after briefly topping $1 300 earlier this week to reach the highest since January 2015.
The metal has climbed 21% this year, helped by speculation that the Federal Reserve will be slow to tighten monetary policy amid global growth risks and after lending rates in the euro area and Japan fell below zero. Fed officials are highlighting the prospect of a rate increase next month, with the payroll data key for investor assessment of the policy landscape. Holdings in exchange-traded funds rose to the highest since December 2013.
Gold will continue to rise until the Fed decides to accelerate rate increases, which is not likely until after June, Mark To, head of research at Wing Fung Financial Group, a trader and refiner in Hong Kong, said by e-mail. Weaker-than-expected payrolls “data can help sustain expectations for a slow pace of rate hike.”