- U.S. non-farm payrolls report due on Friday
- Traders see 75% chance of a 25-bps rate cut in Dec
- Powell says Fed can afford to be a little more cautious
Dec 5 (Reuters) - Gold prices edged lower on Thursday as investors held back from placing big bets ahead of U.S. non-farm payrolls data that could influence the Federal Reserve's interest rate trajectory.
Spot gold was down 0.2% at $2,645.02 per ounce, as of 0848 GMT. U.S. gold futures also eased 0.2% to $2,669.70.
The market's focus is on initial jobless claims due later in the day and U.S. non-farm payrolls (NFP) report on Friday, with the payrolls likely increasing by 200,000 jobs in the month after rising by only 12,000 in October.
A robust NFP number is more or less priced in, and if we see weakness in the report, it could add some support to gold prices as the market is kind of pricing in that the U.S. economy is doing quite well, said Ole Hansen, head of commodity strategy at Saxo Bank.
"I think for now we're approaching the year-end. Big decisions are not being made at this point in time. So, it's mostly intraday stuff and perhaps some profit-taking emerging ahead of year-end," Hansen said.
Fed Chair Jerome Powell said on Wednesday that the U.S. economy is stronger than expected and suggested a more cautious stance towards interest rate cuts. Echoing this, San Francisco Fed Bank President Mary Daly said there is no urgency in cutting rates.
Traders are pricing in a 75% chance of a 25-basis-point cut at the Fed's Dec. 17-18 meeting, according to the CME Group's FedWatch Tool. Bullion, which does not pay any interest, historically performs well in a low-interest rate environment.
"If the Fed skips its interest rate cut in the December meeting, this could trigger a further sell-off in elevated speculative positions, dragging (gold) prices lower," ANZ said in a note.
Spot silver fell 0.2% to $31.24 per ounce. Platinum rose 0.7% to $947.90 and palladium gained 0.5% to $982.73.
"Auto catalyst demand substitution from palladium to platinum has been the key headwind for palladium and is likely to continue into 2026," ANZ added.
Reporting by Anushree Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips
Source: Reuters