Gold on track for weekly gain

Bengaluru — Gold prices held steady on Friday ahead of a keenly watched US jobs report that could provide some clarity on labour market conditions, and were headed for their biggest weekly gain since March.

Spot gold was little changed at $1,709.63/oz by 3.56am GMT. Prices have risen about 3% so far in the week, helped by a retreat in the dollar and Treasury yields from multiyear peaks. US gold futures were down 0.2% at $1,718.20. The dollar index was down 0.1% and benchmark US 10-year Treasury yields steadied after rising overnight.

“For gold prices, the downside is more open than the upside, simply for no other reason than that the Fed hasn’t pivoted yet,” said Stephen Innes, managing partner at SPI Asset Management. “If we get a strong payrolls, gold goes down. If we get a weak payrolls, gold may go up to $1,725.”

The US nonfarm payrolls report is due at 12.30pm GMT, with economists forecasting 250,000 jobs to have been added last month, compared with 315,000 in August.

Earlier this week, data showing declines in US job openings and weaker manufacturing, and a smaller-than-expected rate hike by the Australian central bank stoked hopes of a slowdown in the Fed’s rate-hike pace. However, those hopes faded as Fed officials reiterated their commitment to containing inflation, which is running way above the central bank's 2% target.

While gold is traditionally seen as a hedge against inflation, rapid US monetary policy tightening has reduced the non-yielding bullion’s appeal while boosting the dollar.

Spot silver rose 0.3% to $20.70/oz. Prices were headed for their biggest weekly rise since July, jumping 9% so far. Platinum dipped 0.2% to $920.36, but was on track for its biggest weekly gain since June 2021. Palladium fell 0.3% to $2,254.20, but was up for a second straight week.

Reuters