(adds comment and updates prices)
* $1,765.54/oz . gold back from the initial peak of
* US nonfarm payroll data due Friday
* Investors in wait and watch mode ahead of NFP data – Analyst
October 4 (Businesshala) – Gold eased on Monday after firming US Treasury yields rose more than a week ago, but inflation concerns helped keep prices above key support of $1,750 as investors Attention turned to upcoming jobs data.
Spot gold was down 0.4% at $1,752.60 an ounce by 1216 GMT, hitting its highest level since September 23 at $1,765.54 during the Asian session. US gold futures fell 0.3% to $1,753.30.
“Gold will track moves in US yields, while risk appetite will continue to provide short-term direction in terms of safe-haven demand ahead of the US non-farm payrolls report on Friday,” said Ricardo Evangelista, senior analyst at ActiveTrades.
The report, expected to show continued improvement in the labor market, could affect the Federal Reserve’s timeline for easing economic support.
Therefore, “investors are in a wait-and-see mode”, and any indication of the timing of the Fed’s next decision could provide a new direction for gold, said Kinesis Money analyst Carlo Alberto de Casa.
Lower central bank incentives and interest rates raise bond yields, increasing the opportunity cost of holding non-interest bearing gold.
While gold is sliding higher on Friday, it could benefit as investors worry about China’s Evergrande crisis and rising energy prices, posing risks to global economic growth, Evangelista said .
Bullion is considered a hedge against rising inflation and financial instability.
Recent data shows euro area inflation hit a 13-year high last month, while US consumer spending rose in August.
Gold appears to largely ignore the fall in the dollar, an unusual phenomenon as a lower dollar makes gold cheaper for those holding other currencies.
Silver fell 0.7% to $22.36 an ounce, platinum fell 1.9% to $953.09 and palladium fell 0.7% to $1,906.22. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Robert Birsel and Jan Harvey)