Gold granulate is seen at a plant of gold refiner and bar manufacturer Valcambi in the southern Swiss town of Balerna. Picture: REUTERS/MICHAEL BUHOLZER
Gold granulate is seen at a plant of gold refiner and bar manufacturer Valcambi in the southern Swiss town of Balerna. Picture: REUTERS/MICHAEL BUHOLZER

Bengaluru — Gold prices edged higher on Friday and were on track for their best week in 15, as the dollar weakened on renewed speculation of an imminent pause in the US Federal Reserve’s tightening cycle.

Markets now await US nonfarm payrolls data, expected at 1.30pm GMT, for clues about the health of the world’s biggest economy which could influence monetary policy. Nonfarm payrolls for November are expected to fall by 200,000 jobs.

US unemployment and wage data are also expected on Friday.

“Markets will be quiet until the US nonfarm payroll figure comes out,” said Peter Fung, head of dealing at Wing Fung Precious Metals.

Spot gold climbed 0.2% to $1,239.90/oz by 4.43am GMT, having hit a near five-month peak at $1,244.32/oz in the previous session. With a rise of 1.5% this week, gold looked set to clock its best gain since the week of August 24.

US gold futures were marginally higher at $1,244.2/oz.

Gold participants were hopeful after The Wall Street Journal reported that Federal Reserve officials were considering whether to signal a new wait-and-see mentality after a likely interest rate increase at their meeting in December.

“Gold is sensitive to monetary policy changes,” said Mark To, the head of research at Wing Fung Precious Metals in Hong Kong. “If there is a slowing down in interest rate hikes, I think by the end of this year $1,250-$1,260 should be easily reachable for gold.”

Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.

Meanwhile, the dollar index weakened, pressured by worries about lower US long-term treasury yields, with an inversion of the yield curve signalling a sharp economic slowdown or even a recession down the road.

Asian shares fought to sustain the slimmest of recoveries as the arrest of smartphone maker Huawei’s CFO further soured China-US relations.

Gold-backed exchange-traded funds registered inflows in all the world’s major regions in November, as volatile stock markets fuelled flight-to-safety buying, the World Gold Council said on Thursday.

Silver was unchanged at $14.47/oz.

Palladium slipped 1% to $1,197.00/oz. Platinum fell 0.2%, to $785.24/oz, extending losses into a fifth successive week. Platinum has slipped 1.3% this week.