Gold heads for best week since early April

Bengaluru — Gold was set on Friday for its biggest weekly gain in nearly two months, as hopes for a pause in the Federal Reserve’s tightening campaign bolstered bullion’s appeal amid progress on the US debt-ceiling deal.

Spot gold was flat at $1,978.74/oz by 2.41am GMT. US gold futures were also little changed, at $1,996.20.

Bullion has gained 1.7% so far in the week, heading for its best week since the week ended April 7.

Current gold market sentiment remains constructive, and prices could move a little higher from here as the Fed is expected to stay on hold in June, said Edward Meir, a metals analyst at Marex.

Philadelphia Fed President Patrick Harker said on Thursday US central bankers should not raise interest rates at their next meeting, even though high inflation is coming down at a “disappointingly slow” pace.

Markets now see a 73.7% chance of rates remaining unchanged in June. Gold, which does not yield any interest of its own, loses appeal when interest rates rise.

The dollar index traded close to a one week-low, making gold less expensive for buyers holding other currencies.

Meanwhile, the US Senate passed bipartisan legislation backed by President Joe Biden that lifts the government's $31.4-trillion debt ceiling, averting what would have been a historic, first-ever default.

On the data front, investors will keep a tab on the US labour department’s non-farm payrolls report due at 12.30pm GMT.

The figures could again sway “market opinion with regards to what the FOMC [federal open market committee] does next week”, said Tim Waterer, chief market analyst at KCM Trade.

A strong labour market print could see a bounce-back in the dollar, which would not help gold, Waterer added.

Spot silver rose 0.1% to $23.926/oz and was up 2.7% for the week.

Platinum fell 0.2% to $1,004.32, while palladium held steady at $1,393.94.

Reuters