Gold holds near lowest in three months

Singapore - Gold traded near its lowest level in more than three months as investors await the monthly US payrolls report on Friday for a steer on the strength of the economy and the chances of an interest-rate hike this year.

Bullion for immediate delivery fell 0.1% to $1 265.80 an ounce as of 08:58, near the June 24 low of $1 262.22 hit on Wednesday. Prices slumped 3.3% the previous day, the biggest drop in more than a year, on worries that central banks will adopt less accommodating monetary policies.

Gold has been rattled by rising bond yields and concern that policy makers are starting to question whether monetary easing alone will be enough to revive the global economy.

Federal Reserve vice chairperson Stanley Fischer called on Wednesday for “transparent and sound monetary policies,” as well as investments in infrastructure and education, to boost growth in the long run. US employers, including government agencies, took on 172 000 workers in September, while the jobless rate held at 4.9 percent, economists estimate.

“Investors will still be looking at the non-farm payrolls data this Friday to determine” if the Fed will increase borrowing costs, Brian Lan, managing director of Singapore-based GoldSilver Central Pte, said in an email.

“There will be a lot of volatility in the gold market in this last quarter of the year.”

Even as gold prices head for an eighth straight day of losses, the worst stretch since May, investors are adding to holdings in exchange-traded funds. Assets climbed for a fourth day to 2 037.5 metric tons on Wednesday, near the highest since 2013, data compiled by Bloomberg show.

Odds of a US interest-rate increase in December have climbed to 62% from 54% a week ago, according to futures data compiled by Bloomberg.

Ultra-low rates are not necessarily here to stay, especially if the right policies are put in place to address at least some of their root causes, Fischer said in the text of a speech he was scheduled to deliver in New York.

Spot silver, platinum and palladium rose by as much 0.3%.

Read Fin24's top stories trending on Twitter: Fin24’s top stories