Gold prices near 1-week lows as investors look to riskier assets

Gold prices on Tuesday held near one-week lows touched in the previous session, pressured by a firmer dollar and as investor appetite for riskier assets picked up in the wake of strong US economic data.

FUNDAMENTALS

Spot gold was steady at $ 1,312.15 per ounce at 0110 GMT. Prices in the last session fell to their lowest level since Jan. 29 at $ 1,308.20.

US gold futures dipped 0.2 per cent to $ 1,316.50 an ounce.

China’s financial markets are closed all week for the Lunar New Year holiday.

US job growth surged in January, with employers hiring the most workers in 11 months, pointing to underlying strength in the economy despite an uncertain outlook.

The solid jobs report allayed concerns of the slowdown in the US economy, leading traders to trim bets the US Federal Reserve would need to cut interest rates to support the economy later this year.

The Fed’s new wait-and-see approach to monetary policy is suitable for now, Cleveland Fed President Loretta Mester said on Monday, but the central bank may need to raise interest rates a bit further if the economy does as well as she expects.

Recent US data helped lift Asian stocks early on Tuesday.

* The dollar held on to recent gains against its peers on Tuesday, supported by a recovery in investor risk appetite, which helped push up US yields.

The US-China trade talks had a “good vibe” with much work remaining, White House economic adviser Larry Kudlow said on Friday as China followed through on a pledge to increase soybean purchases with orders of at least 1 million tonnes.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.50 per cent to 813.29 tonnes on Monday from Friday.