Gold holds steady as investors weigh faster Fed taper prospects
Gold prices held steady on Monday as market participants weighed the prospect of a faster ending to pandemic-era asset purchases by the U.S. Federal Reserve after data suggested the labour market was rapidly tightening.
Spot gold was little changed at $1,783.91 per ounce by 0038 GMT. U.S. gold futures rose 0.1% to $1,785.00.
The dollar index edged 0.1% higher, raising gold’s cost for buyers holding other currencies.
Fed policymakers look likely to accelerate the wind-down of their asset purchases when they meet later this month as they respond to a tightening labor market and move to open the door to earlier rate hikes than they had projected.
U.S. employment growth slowed considerably in November, but the unemployment rate plunged to a 21-month low of 4.2%.
Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of non-interest bearing gold.
A measure of U.S. services industry activity unexpectedly rose in November, hitting a record high as businesses boosted hiring, but there was little sign that supply constraints were easing and prices remained high.
Bank of England policymaker Michael Saunders, who voted for an interest rate hike last month, said on Friday he wanted more information about the impact of the new omicron coronavirus variant before deciding how to vote this month.
Euro zone business activity accelerated last month but the bounce may be temporary as demand growth weakened and fears about the omicron variant put a dent in optimism, a survey showed on Friday.
Spot silver rose 0.3% to $22.57 an ounce. Platinum rose 0.8% to $939.78, while palladium increased 0.7% to $1,821.49.
· U.S. dollar net longs jump to highest since mid-June 2019 - CFTC, Reuters data
· Antipodeans battle to stem Omicron slide; cryptos lick weekend wounds
Riskier currencies fought for a foothold on Monday against a dollar, buoyed by uncertainty around the Omicron variant and the expectation of more hot U.S. inflation data putting upward pressure on interest rates.
Cryptocurrencies nursed big losses from a wild weekend that at one stage crushed bitcoin more than 20%. Bitcoin found support around $49,000 on Monday.
The safe haven yen also eased 0.1% on Monday to 113.00 per dollar with the cautiously brighter mood, though analysts expect a bumpy ride ahead with trade most likely sensitive to Omicron news and U.S. inflation data on Friday.
The euro was last stable at $1.1303 and sterling steadied at $1.3232.
The U.S. dollar index began the week steady at 96.211, within range of November's 16-month peak of 96.938.
· Bitcoin falls by a fifth, cryptos see $1 billion worth liquidated
Bitcoin shed a fifth of its value on Saturday as a combination of profit-taking and macro-economic concerns triggered nearly a billion dollars worth of selling across cryptocurrencies.
Bitcoin was 12% down at 0920 GMT at $47,495. It fell as low as $41,967.5 during the session, taking total losses for the day to 22%.
· South Africa readies hospitals as Omicron variant drives new COVID-19 wave
· Omicron Covid variant poses greater risk for the unvaccinated, former White House advisor says
· Omicron Covid variant poses greater risk for the unvaccinated, former White House advisor says
Reference: CNBC, Reuters
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