Gold extended gains on Tuesday and was on track for its biggest daily rise in a month, after grim data on US job openings further clouded the economic picture ahead of the Federal Reserve’s widely anticipated decision to hike interest rate.
Spot gold jumped 1.3% to $2,008.30 per ounce by 10:35 a.m. EDT (1435 GMT) after touching its highest since April 20. U.S. gold futures rose 1.3% to $2,018.10.
U.S. job openings fell for a third straight month in March, but remained at levels consistent with a tight labor market.
This data is pretty bad right now. It provides more optimism that the Fed could be dovish, but it doesn’t provide enough clarity to cement that view, said Edward Moya, senior market analyst at OANDA.
“But it’s in the right direction, so the doves will run with it.”
The Federal Open Market Committee kicked off its two-day meeting, where it is widely expected to raise rates by 25 basis points.
Gold has also been supported by some safe-haven demand from resurgent worries over the banking sector’s health and U.S. debt ceiling uncertainty, Bank of China International analyst Xiao Fu said.
U.S. President Joe Biden on Monday summoned four top congressional leaders to the White House next week after Treasury Secretary Janet Yellen warned the government could run short of cash to pay its bills by June.
Gold clocked a more than 1% gain in April amid the U.S. banking crisis and briefly rose above $2,000 on Monday after regulators seized and sold First Republic Bank’s assets to JPMorgan Chase & Co.
While gold is considered a hedge against economic uncertainties, rising rates hurt demand for the zero-yielding asset.
Spot silver rose about 1% to $25.22 per ounce, platinum was up 0.1% to $1,051.21 and palladium fell 0.5% to $1,443.51 per ounce.
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