* Dollar stabilizes near one-year high
* Gold in the NFP data-analyst is likely to digest a positive surprise (repeat, adds comment, updated prices)
October 7 (Businesshala) – Gold prices fell in a narrow range on Thursday as investors cleared big bets ahead of US jobs data that could dictate the Federal Reserve’s monetary policy normalization plans.
Spot gold was down 0.2% at $1,759.31 an ounce by 0904 GMT, while US gold futures were little changed at $1,761.20.
The US dollar held steady near a one-year high fueled by inflation concerns and expectations that the Fed would have to act soon to normalize policy.
While gold has traditionally been viewed as an inflation hedge, a stronger dollar makes gold more expensive for holders of other currencies.
“There are some bottlenecks related to the supply chain and energy markets, but it is not something that will derail the global economy. Therefore, there is no real reason for investors to seek gold as a safe haven,” said Carsten Menke, analyst at Julius Baer.
However, given the “record high” number of open jobs in the US, a positive surprise on non-farm payrolls should be accommodative without a major sell-off for the gold market”, Menke said, adding that prices are likely to be volatile.
Meanwhile, a strong showing of private jobs in September ahead of Friday’s employment numbers raised bets that the Fed may soon begin to tighten monetary stimulus.
Lower incentives and higher interest rates raise bond yields, which translates into an increased opportunity cost of holding non-yielding bullion.
“We need to see gold prices move above key resistance levels before we have a better idea of whether gold is about to end its short-term bearish trend,” said Vincent Tye, sales manager at Singapore-based dealer Silver Bullion.
Elsewhere, spot silver rose 0.1% to $22.62 an ounce and palladium rose 0.3% to $1,895.07, while platinum fell 0.3% to $981.51. (Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru Editing by David Goodman)