Gold prices eased on Thursday as dollar ticked higher, with investors awaiting more cues on the timing of the U.S. Federal Reserve’s first interest rate cut this year, while palladium prices dropped to a fresh five-year low as demand concerns persist.
Spot gold fell 0.4% to $2,026.39 per ounce, as of 1230 GMT. U.S. gold futures lost 0.5% to $2,041.10 per ounce.
The dollar index gained 0.2%, making bullion more expensive for other currency holders.
"At this point in time, there’s nothing really in the price action that suggests we’re going to see a breakout in either direction. The data we’ve seen recently shows that policymakers are still unsure as to whether it’s quite time yet for interest rate cuts," said Craig Erlam, senior markets analyst at OANDA.
Fed officials want to hold off on cutting interest rates until they have more confidence that inflation is headed down to 2%, and gave a range of reasons for feeling little urgency to start easing policy soon or to move quickly once they do. High-interest rates increase the opportunity cost of holding bullion.
Investors will be watching out for U.S. weekly jobless claims data due at 1330 GMT after last week’s monthly non-farm payrolls report came in stronger-than-expected, showing signs of persistent strength in the labour market. Spot palladium, meanwhile, fell 1.9% to $877.40 per ounce, after hitting $874.24, its lowest since August 2018, earlier in the session.
"The demand picture doesn’t look fantastic at the moment, be it as a result of automotive industry changes (EVs), or the industrial sector woes of countries like Germany and China. Momentum and sentiment are firmly against the palladium price," said Tim Waterer, chief market analyst at KCM Trade.
Both platinum and palladium are used by automakers in catalytic converters to clean car exhaust fumes. Elsewhere, silver rose 0.6% to $22.32 per ounce and platinum lost 0.3% to $876.94.
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