Gold prices inched higher Thursday, boosted by a weaker dollar with investors awaiting announcements out of Washington and Friday's jobs report.
Gold for December delivery swung between small gains and losses closed up 0.1% at $1,278.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Price moves have been muted in recent sessions, with some analysts noting that changes to the Federal Reserve's outlook or sustained moves in the dollar could give the market more direction.
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On Wednesday, the Fed left rates unchanged but suggested it remained on course to lift them before year's end amid signs the economy is gaining momentum. Additionally, The Wall Street Journal reported that the White House has informed Fed governor Jerome Powell that President Donald Trump intends to nominate him as the next chairman of the central bank. A formal announcement is expected later Thursday.
Because gold struggles to compete with yield-bearing assets like Treasurys as borrowing costs rise, the central bank's outlook for rate increases has affected the outlook for gold throughout the year. Some investors and analysts have said they think Mr. Powell will continue the Fed's pattern of gradually raising rates, a positive for gold moving forward because more hawkish candidates have been under consideration.
The gold market was pausing ahead of the formal announcement and Friday's jobs report, said Jim Wyckoff, senior analyst at Kitco Metals, to see how the central bank's actions might change moving forward. A December rate increase is widely increased, but changes to the Fed's future plans because of weak inflation could support gold, Mr. Wyckoff said.
"I think [a December rate increase] is pretty much baked into the cake, but beyond that, what's the pace? Maybe this jobs report gives a clue to that," Mr. Wyckoff said.
Investors were also paying close attention to the dollar's moves, as gold and other dollar-denominated metals become cheaper to foreign buyers when the U.S. currency falls. The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, was recently down less than 0.1%.
The dollar inched lower after the Journal reported that the Republican tax plan, scheduled to be officially released later in the day, aims to permanently chop the corporate tax rate from 35% to 20%, compress the number of individual income tax brackets and repeal the taxes paid by large estates starting in 2024.
Among base metals, copper for December delivery closed up less than 0.1% at $3.1435 a pound. The industrial metal sits near three-year highs, buoyed by a positive global economic backdrop, strong demand from China and the prospect that electric vehicles will stoke demand for base metals moving forward.
Write to Amrith Ramkumar at email@example.com and David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
November 02, 2017 14:15 ET (18:15 GMT)