Gold edges up as dollar slips after US jobs openings rose unexpectedly

Gold held near a seven-month low on Wednesday, while palladium slipped to its weakest level since late 2018, as a sell-off in the U.S. bond markets lifted yields after economic data raised worries that interest rates will likely remain high.

Spot gold was steady at $1,822.20 per ounce by 0948 GMT, while U.S. gold futures dropped 0.2% to $1,838.40.

Data on Tuesday showed U.S. job openings rose unexpectedly in August, pointing to a still-tight labour market that could lead the Federal Reserve to raise interest rates next month.

The benchmark U.S. 10-year bond yield scaled fresh 16-year highs, while sentiment in wider financial markets also remained weak as the bond rout continues.

Gold has shed more than $100 in the past two weeks as bets for higher-for-longer U.S. interest rates dented the zero-yielding asset's appeal and partly overshadowed its traditional safe-haven role.

A fall below $1,800 is likely, if the narrative that the Fed will keep interest rates higher for longer continues to gain traction, said ActivTrades senior analyst Ricardo Evangelista.

Meanwhile, Fed officials consider rising long-term Treasury yields as evidence their tight-money policies are working.

Markets are pricing in a 44% chance of another 25-basis-point rate hike this year, according to the CME FedWatch tool. The investor focus remains on U.S. non-farm payrolls data on Friday for cues on the Fed's rate hike path.

"Asia's retail gold demand should rebound October-February and CBs (central banks) continue to add to gold reserve holdings, which should be supportive for markets over a 6-12 month horizon," analysts at Citi Research said in a note.

Elsewhere, auto-catalyst metal palladium dropped 1.7% to $1,169.28 after hitting its lowest since November 2018 earlier in the session.

Spot silver was down 0.2% at $21.12 per ounce, having slipped to its lowest since mid-March on Tuesday, while platinum slipped 0.1% to $870.58, after hitting its lowest in a year.

 

(Reporting by Harshit Verma in Bengaluru, additional reporting by Brijesh patel; Editing by Alexander Smith, Kirsten Donovan)