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Gold steady near lowest in over four weeks, rate hike outlook drags

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Reuters
Last Updated : Mar 08 2017 | 7:07 AM IST

(Reuters) - Gold prices were steady on Wednesday ahead of U.S. payrolls data this week, but were not far from over four-week lows hit in the previous session on increased expectations of a U.S. rate hike in March.

FUNDAMENTALS

* Spot gold was mostly unchanged at $1,216.1 per ounce at 0045 GMT. The metal marked its lowest since Feb. 3 at $1,213.6 an ounce in the previous session.

* U.S. gold futures were flat at $1,216.4.

* The dollar index was down 0.1 percent at 101.75.

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* Jeffrey Gundlach, chief executive officer at DoubleLine Capital, said on Tuesday he expects the Federal Reserve to begin a campaign this month of "old school" sequential interest rate hikes until "something breaks", such as a U.S. recession. [nL2N1GK26J]

* U.S. Fed Chair Janet Yellen said last week that the central bank was poised to lift benchmark U.S. rates provided jobs and inflation data held up, comments seen as cementing plans for an increase at the Fed's March 14-15 meeting. [FED/DIARY]

* Early last week, financial markets saw just a 30 percent chance of the Fed raising interest rates in March; but by Friday after a striking series of comments from Fed officials, traders saw an 80 percent chance. [nL2N1GK1AK]

* The U.S. economy is on track to grow at a 1.3 percent annualized pace in the first quarter following the latest data on domestic vehicle sales and factory orders, the Atlanta Fed's GDP Now forecast model showed on Tuesday. [nL2N1GK13V]

* Investors are now awaiting non-farm payrolls data for February on Friday, seen rising by 190,000 in a Reuters poll , regarded as an important barometer of the U.S. economy.

* China's gold reserves were unchanged for a fourth month in February, the country's central bank said on Tuesday, the longest time in which it has not added to its holdings since it began updating the data monthly in mid-2015. [nL3N1GK38N]

* South African stocks edged lower on Tuesday, led by gold mining shares as the price of the metal slipped to its weakest level in four weeks, while the rand gained, shrugging off a fourth quarter contraction in gross domestic product. [nL5N1GK4SM]

* Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust , fell 0.45 percent on Monday. [GOL/ETF]

DATA AHEAD (GMT)0200 China Trade data Feb0745 France Trade data Jan0800 Germany Industrial output Jan1315 U.S. ADP national employment Feb1500 U.S. Wholesale sales Jan

(Reporting by Arpan Varghese in Bengaluru; Editing by Joseph Radford)

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First Published: Mar 08 2017 | 6:59 AM IST

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