Gold steadies after downbeat March, awaits U.S. jobs data
London (Apr 1) Gold steadied on Wednesday in line with the dollar after ending March down more than 2 percent, paring early gains as expectations that U.S. interest rates will rise this year weighed on the metal.
The dollar was little changed against a basket of currencies in the run-in to the Easter weekend and Friday's U.S. nonfarm payrolls numbers.
Spot gold was at $1,183.88 an ounce at 1238 GMT, little changed from Tuesday, while U.S. gold futures for June delivery were up 40 cents an ounce at $1,183.60. Earlier, spot prices touched a high of $1,188.90.
A strong reading from the U.S. jobs data on Friday could boost bets the Federal Reserve will hike interest rates sooner rather than later, lifting the opportunity cost of holding non-yielding gold.
Gold is particularly sensitive to shifts in U.S. interest rates, which also move the dollar, in which the metal is priced.
"All the markets are watching the Fed deliberations," Societe Generale analyst Robin Bhar said. "We have the key non-farm payrolls data this Friday. Assuming that stays strong, the impact on the dollar would be for it to resume its strengthening trend."
"Gold is going to find it difficult to weather the headwinds coming from tightening monetary policy."
Bullion has dropped nearly 3 percent since touching a three-week high last week, as the dollar gained momentum after Fed Chair Janet Yellen's comments on Friday suggested a rate hike is still on the cards for later this year.
Yellen's remarks halted a seven-day rally in gold, its longest since 2012, that had been spurred by hopes the Fed would take it slow in raising rates.
The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Trust, in March recorded its biggest monthly outflow since December 2013.
Buying interest in China, the world's second-largest gold consumer after India, has been relatively soft of late, but dealers reported some interest overnight after prices eased.
"Following yesterday's sell off, China was back as a buyer today," MKS said in a note. "We saw gold add a few dollars in Tokyo before Shanghai took over and sent the yellow metal to a session high."
Silver was down 0.7 percent at $16.53 an ounce, while platinum was down 0.7 percent at $1,130.50 an ounce and palladium was up 0.4 percent at $735.30 an ounce.
Silver saw the biggest gain among the precious metals in the last quarter, rising 6 percent, while palladium fell 7.6 percent. Platinum fell just over 5 percent.