(Bloomberg) -- Gold declined -- after surging past $1,700 an ounce on Tuesday -- as traders weighed whether central banks may moderate their hawkish stances after the release of weak US data.
Bullion jumped almost 4% in the previous two sessions, buoyed by a poorer-than-expected US manufacturing gauge and a decline in US job openings. The precious metal had fallen below $1,700 an ounce last month amid a strong dollar and surging Treasury yields.
Disappointing US economic prints suggest the Federal Reserve may slow its aggressive rate-hiking path, which would increase the appeal of gold that doesn’t offer any interest. More employment data due this week may offer clues on the likely tightening trajectory.
“Gold’s bottom is in place now that the US is showing clear signs the labor market is softening,” Ed Moya, senior market analyst at Oanda, said in a note. As long as the US nonfarm payrolls do not see an “extraordinary strong print”, gold should remain supported and may test the $1,750 an ounce, he said.
Spot gold declined 0.4% to $1,719.47 an ounce as of 11:53 a.m. in Singapore. The Bloomberg Dollar Spot Index gained 0.2% following Tuesday’s 1% slide. Silver, palladium and platinum fell.