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U.S. dollar index nears 2-month low
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Focus on U.S. nonfarm payrolls due on Friday
(Updates prices)
By Deep Kaushik Vakil
April 5 (Reuters) - Safe-haven gold touched its highest
in one year on Wednesday as recent U.S. economic data fanned
fears of a slowdown and spurred bets the Federal Reserve may
ease up on rate hikes.
Spot gold was steady at $2,020.30 per ounce by 01:46
p.m. EDT (1746 GMT), after rising to its highest since March
2022 at $2,031.89 earlier.
U.S. gold futures settled 0.1% lower at
$2,035.60.
Gold raced past the key $2,000 level on Tuesday after a
sharp drop in U.S. job openings in February, adding on to gains
from earlier this week after an OPEC-led spike in oil triggered
worries of another run higher in inflation. Gold could sustain gains above the $2,000 level as economic
worries grow, analysts said.
UBS forecasts gold prices to surpass their all-time high and
reach $2,200 by the end of March 2024.
Softer-than-expected growth in private payrolls in March
also exacerbated worries over the economic toll from the Fed's
rapid rate hikes. Bullion found additional support from a
subdued dollar overall, and a retreat in U.S. yields. "That downbeat economic data we got yesterday put a little
risk aversion back into the marketplace and that's beneficial
for safe-haven gold," said Jim Wyckoff, senior analyst at Kitco
Metals.
Traders now see a 60% chance of U.S. rate hikes pausing in
May, brightening the outlook for zero-yield gold and its status
as the preferred inflation hedge.
But Carsten Menke, head of Next Generation Research at
Julius Baer, in a note, warned that a U.S. recession might still
be avoided while a "rapid reversal" of Fed policy was unlikely.
The U.S. nonfarm payrolls data on Friday could provide
further cues, although analysts said market reaction might be
apparent only next week due to the Good Friday holiday.
Silver eased 0.4% at $24.90 per ounce, platinum lost 2% to $997.22, while palladium slipped 2.2%
to $1,425.34.
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(Reporting by Deep Vakil in Bengaluru; Editing by Krishna
Chandra Eluri and Shilpi Majumdar)
