Gold steadied below a seven-week high on Tuesday as the dollar regained momentum, although uncertainty about the timing of a U.S. interest rate hike kept bullion above $1,200 an ounce. Friday’s bleak U.S. non-farm payrolls data fuelled expectations that the Federal Reserve could delay an anticipated rate increase this year, boosting gold’s safe-haven appeal. U.S. jobs posted the slowest growth in more than a year in March. New York Fed President William Dudley said the timing of the U.S. rate hike, which would be the first in nearly a decade, is unclear and policymakers must watch that the U.S. economy’s surprising recent weakness does not signal a more substantial slowdown.
“We haven’t changed our expectation of a mid-year rate hike but the weak number we had on Friday certainly eschews the risk towards more of a later rather than an earlier hike,” said Victor Thianpiriya, analyst at Australia and New Zealand Bank. Spot gold was nearly flat at $1,213.80 an ounce at 0243 GMT, after hitting a session high of $1,224.10 on Monday, its loftiest since Feb. 17.
U.S. gold for June delivery slipped 0.4 percent to $1,214.20 an ounce. Thianpiriya said he still expects gold to drop to $1,100 by end-June, under pressure from a firmer dollar. A stronger greenback makes dollar-denominated assets such as gold more expensive for holders of other currencies. “We expect the momentum in the U.S. economy is still there and we will get that tone in (incoming) data and that will be reflected in a stronger U.S. dollar,” he said. Growth in U.S. services sector slowed in March to its lowest level in three months, but the index of new export orders rose to the highest level in more than two years.
Technically, bullion is finding support around $1,210 and a close above $1,225 will suggest a trend higher, said MKS Group trader Sam Laughlin. But Asian physical demand remains tepid at current levels.
Premium for physical gold at the Shanghai Gold Exchange was less than a dollar an ounce over the global spot benchmark on Tuesday, from around $2-$3 last week as the Chinese return from a long holiday weekend.
“The gold price right now for a Chinese consumer is not cheap, it needs to be cheaper,” said ANZ’s Thianpiriya.
Precious metals prices at 0243 GMT Metal Last Change Pct chg YTD pct chg Spot Gold 1213.80 -0.50 -0.04 2.56 Spot Silver 16.89 -0.08 -0.47 7.85 Spot Platinum 1167.50 -6.50 -0.55 -2.70 Spot Palladium 767.00 -0.50 -0.07 -3.24 COMEX GOLD JUN5 1214.20 -4.40 -0.36 2.54 COMEX SILVER MAY5 16.92 -0.19 -1.11 8.47 Euro/Dollar 1.0946 Dollar/Yen 119.55 COMEX gold and silver contracts show the most active months

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