Gold holds steady as investors weigh faster Fed taper prospects

2 minute read
Register now for FREE unlimited access to Reuters.com

Dec 6 (Reuters) - Gold prices held steady on Monday as market participants weighed the prospect of a faster ending to pandemic-era asset purchases by the U.S. Federal Reserve after data suggested the labour market was rapidly tightening.

FUNDAMENTALS

* Spot gold was little changed at $1,783.91 per ounce by 0038 GMT. U.S. gold futures rose 0.1% to $1,785.00.

* The dollar index edged 0.1% higher, raising gold's cost for buyers holding other currencies.

Register now for FREE unlimited access to Reuters.com

* Fed policymakers look likely to accelerate the wind-down of their asset purchases when they meet later this month as they respond to a tightening labour market and move to open the door to earlier rate hikes than they had projected. read more

* U.S. employment growth slowed considerably in November, but the unemployment rate plunged to a 21-month low of 4.2%. read more

* Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of non-interest bearing gold.

* A measure of U.S. services industry activity unexpectedly rose in November, hitting a record high as businesses boosted hiring, but there was little sign that supply constraints were easing and prices remained high. read more

* Bank of England policymaker Michael Saunders, who voted for an interest rate hike last month, said on Friday he wanted more information about the impact of the new Omicron coronavirus variant before deciding how to vote this month. read more

* Euro zone business activity accelerated last month but the bounce may be temporary as demand growth weakened and fears about the Omicron variant put a dent in optimism, a survey showed on Friday. read more

* Spot silver rose 0.3% to $22.57 an ounce. Platinum rose 0.8% to $939.78, while palladium increased 0.7% to $1,821.49.

Register now for FREE unlimited access to Reuters.com
Reporting by Nakul Iyer in Bengaluru; Editing by Subhranshu Sahu

Our Standards: The Thomson Reuters Trust Principles.