* Spot gold may bounce in $1,763-$1,768 range before falling technicals
* Palladium jumps 3% to near one-month peak (update prices)
October 11 (Businesshala) – Gold prices tumbled on Monday on fears the US Federal Reserve would start reducing its stimulus this year, despite Friday’s weak jobs data.
Spot gold fell 0.1% to $1,755.68 an ounce by 0556 GMT, while US gold futures fell 0.1% to $1,755.30.
“Payroll data is not going to do anything to stop the Fed from tapering off… the labor shortage is feeding into higher wage pressures and could drive inflation even further, which would mean they eventually have to step in, Said IG Markets analyst Kyle Rodda.
Bullion is seen as a hedge against potential inflation and currency depreciation from a broad stimulus. The Fed’s tapering could tackle both of those situations, reducing gold’s appeal.
“The gold market is having a lot of trouble deciding where it should go from here. My personal bias is the downside, but we’re stuck in a range at the moment,” Roda said.
The Fed could begin to reduce its support for the economy next month, despite a slowdown in job gains last month.
Friday’s data showed US non-farm payrolls grew by 194,000 jobs in September, well short of economists’ forecast of 500,000. Meanwhile, the unemployment rate fell to an 18-month low of 4.8% and wage benefits accelerated.
The dollar rose against the yen to its highest level in nearly three years, while the benchmark US 10-year Treasury yield touched its highest level since early June on Friday, raising the opportunity cost of holding non-interest-bearing gold. Went.
According to Businesshala technical analyst Wang Tao, spot gold is likely to bounce back in the $1,763-$1,768 range before falling towards the $1,724 support level again.
Spot silver was unchanged at $22.66, while platinum rose 0.1% to $1,027.37.
Palladium rose 3% to $2,139.85, having previously peaked on September 13. (Reporting by Eileen Soreng in Bengaluru; Editing by Amy Caron Daniel)