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 eased on Friday, but were headed for their best week this year supported by expectations of an interest rate cut by the Federal Reserve and heightened global trade conflicts, while investors await the US jobs report due later in the session.

Spot gold was down 0.2% at $1,332.31/oz, as of 1.22am GMT, while US gold futures were down 0.4% at $1,337/oz.

However, gold has gained 2.1% so far this week and is set to post its best weekly percentage gain since early December 2018.

“Optimism that the US-Mexico tariffs may be short-lived is currently fuelling optimism in global markets,” Howie Lee, an economist at OCBC Bank, said. “Gold is likely to stay muted through the rest of the day before the release of the non-farm payrolls. Investors want to see the impact on the US jobs market before reassessing the current pessimism.”

Mexican and US officials held a second day of talks on trade and migration on Thursday amid reports US President Donald Trump might delay the imposition of tariffs, which rendered some support to the financial markets.

Meanwhile, Trump said he would decide whether to carry out his threat to hit Beijing with tariffs on at least $300bn in Chinese goods after a meeting of leaders of the world’s largest economies late in June.

Bullion has risen nearly $50/oz after Washington’s threat of tariffs on Mexico, while recent weak economic readings from the US increased hopes of an interest rate cut. Federal Reserve Bank president John Williams on Thursday said concerns about escalating trade tariffs and slowing global growth are boosting uncertainty and holding back business investment, but he is keeping an open mind on interest rates.

Investors now await data on US non-farm payrolls due at 12.30pm GMT for clues on the trajectory of interest rates. “If we get a poor non-farm number, then the dollar would sell off and gold can regroup,” said INTL FCStone analyst Edward Meir.

The dollar index , which is set to post its worst week since the week ended March 15, was relatively unchanged against a basket of major currencies on Friday.

“There is a lot of [technical] resistance around the present levels. The $1,350 needs to be taken out and the next target is $1,370, which is a more stubborn resistance,” Meir said.

Among other metals, silver gained 0.2% to $14.88/oz, on track for its best week since January 25. Platinum eased 0.4% to $799.73, but the auto-catalyst metal was headed for its first weekly gain in seven. Palladium edged 0.1% higher at $1,352.90/oz.