Gold extends gains on lower oil and softer dollar, markets await US jobs data
Gold rose for a third straight session on Wednesday, helped by a softer dollar and lower oil prices, while investors awaited U.S. jobs data for clues on the interest-rate outlook.
Spot gold was up 1.3% at $4,127.04 per ounce, as of 0253 GMT. U.S. gold futures rose 0.8% to $4,184.40.
The U.S. dollar remained subdued, making greenback-priced metals more attractive to holders of other currencies. [USD/]
Oil steadied after steep falls in the previous two sessions. Lower oil prices can ease inflation concerns that often feed expectations of higher interest rates.
Qatar said mediators were making progress in efforts to end the U.S.-Iran war, although Tehran has denied U.S. President Donald Trump's assertion that talks are already underway. [O/R]
"Gold's relation with oil is still intact as oil prices have a tremendous impact on the global economy in terms of inflationary pressure. If we get a very clear roadmap to further de-escalation in tensions, gold prices could move higher," said Kelvin Wong, a senior market analyst at OANDA.
Traders are now pricing in a 59% probability of a Federal Reserve interest rate hike at the central bank's September 15-16 meeting, down from 67% a day earlier.
Gold tends to lose its appeal in a high interest-rate environment despite its status as an inflation hedge, as it yields no interest.
Federal Reserve Bank of Philadelphia President Anna Paulson said she was keeping an "open mind" about what lies ahead for monetary policy in an outlook that could call for higher rates.
Traders were looking ahead to the ADP employment report due later in the day and the July payrolls report scheduled for Friday.
Analysts at TD Securities said in a note that they expect gold to remain range-bound near current levels.
Spot silver gained 1.9% to $60.64 per ounce and platinum climbed 1.4% to $1,758.35, its highest level since mid-June. Palladium rose 0.9% to $1,365.62, up for a second straight session.
