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Investors wait for US payroll data to get Fed policy clues

Investors held off on making large bets as they awaited the U.S. Payroll data that would be released later in the day to get a better idea of the Federal Reserve’s policy direction.

As of 0211 GMT spot gold fell 0.3% per ounce to $3346.47, while U.S. Gold Futures edged up 0.1% to $3357.20.

OANDA Senior Market Analyst Kelvin Wong stated that gold appears to be consolidating in the $3,320-$3,360 range. The market is waiting to see what happens with U.S. Non Farm Payroll data and ISM Services' PMI before taking any significant positions.

ADP released data showing that private payrolls in the United States fell by 33,000 positions in June. This was the first drop in over two years as economic uncertainty hindered hiring. Low layoffs continue to stabilize the labour market.

Investors await the non-farm payrolls data on Thursday. According to a survey, it is expected that 110,000 new jobs were added in June, compared to 139,000 in May.

On Wednesday, Donald Trump, president of the United States, announced that the U.S. would impose a 20% tariff, which is lower than what was promised, on a variety of goods coming from Vietnam. The Southeast Asian country is the U.S. tenth largest trading partner.

Wong stated that "the Vietnam trade deal is likely to have already been priced in the market. I think now the primary concern is the status other deals with major countries which are still in limbo,"

The U.S.-India negotiators worked to reach a deal that would reduce tariffs before Trump's deadline of July 9.

Trump did not indicate that he would extend the deadline for negotiations despite stalled talks with Japan, another important trade partner. However, he expressed optimism regarding an India agreement.

Gold that does not yield tends to do well in an environment of economic uncertainty or low interest rates.

Silver spot fell by 0.6%, to $36.37 an ounce. Platinum lost 1.5%, to $1397.91, and palladium dropped 1.4%, to $1138.73. (Reporting and editing by Sumana Aich and Rashmi Nandy, Bengaluru)

(source: Reuters)