Gold edges lower as dollar climbs to near one-week high ahead of Fed verdict

Gold inched lower on Wednesday, as the dollar rose after a U.S. jobs report indicated a stronger-than-expected labor market, pressuring prices, ahead of a widely anticipated rate cut at the Federal Reserve‘s policy meeting.

FUNDAMENTALS

* Spot gold edged down 0.1% to $4,207.39 per ounce, as of 0102 GMT.

* U.S. gold futures for February delivery were steady at $4,236.60 per ounce.

* The U.S. dollar advanced on Tuesday to a near one-week high as better-than-expected job-market figures underscored a still resilient labor market ahead of the Federal Reserve’s anticipated rate cut. * Benchmark U.S. 10-year Treasury yields advanced on Tuesday, erasing earlier declines, keeping steady at 2-1/2 month highs hit on Monday.
* The U.S. Labor Department released its JOLTS report, which showed job openings rose to 7.67 million in October, beating forecasts of 7.15 million, pointing to a stronger labor market.
* Meanwhile, White House economic adviser Kevin Hassett, the front-runner to be the next Fed chair, told the WSJ CEO Council on Tuesday there is “plenty of room” to cut interest rates further. However, he added that if inflation rises, the calculation may change.
* Analysts expect the Fed to make a “hawkish cut”, where the language of the statement, median forecasts and Chair Jerome Powell’s press conference point to a higher bar for further rate reduction.

* The two-day Federal Open Market Committee (FOMC) meeting ends with a decision on Wednesday. Investors are now pricing in an 88.6% chance of a 25-basis-point cut.

* Non-yielding assets such as gold tend to perform well in low-interest-rate environments. * Spot silver climbed to 0.5% to an all-time high of $61.02 per ounce after having crossed the $60 threshold on Tuesday.

* Elsewhere, platinum lost 1% to $1,672.70, while palladium fell 1% at $1,491.0.

DATA/EVENTS (GMT)

0100 China PPI YY Nov

0100 China CPI YY Nov

0600 US WSD Wheat, Corn, Soybean endstocks 25/26 Dec

0600 US World Soy, Wheat, Corn E/S 25/26 Dec.