Gold stuck below one-week high ahead of jobs data

Bengaluru — Gold held below a one-week high on Friday and was on track for a weekly gain, as market participants focused on US jobs data that could shape the size of an expected rate cut this month.

Spot gold was little changed at $2,516.00/oz by 2.21am GMT, after hitting a one-week high of $2,523.29 in the previous session. Bullion has climbed 0.5% for the week and 22% for the year so far. US gold futures edged 0.1% higher to $2,545.70.

Bullion typically performs better in a low-interest-rate environment and is viewed as a safe asset during periods of uncertainty.

Bets for a 50 basis point (bp) rate cut by the Federal Reserve on September 18 have risen to 41% from 34% a week ago, according to CME Group’s FedWatch tool. The US nonfarm payrolls data due at 12.30pm GMT could provide further clarity.

“Gold prices are likely to edge higher if the upcoming [nonfarm payrolls] report shows signs of labour market weakness, though the market could experience bouts of volatility,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.

“Prices appear poised to test new highs, potentially reaching the $2,680-$2,700 range this year,” she said, adding that geopolitical tension, weakness in the dollar, persistent central bank buying and uncertainty surrounding the US elections had underpinned the outlook for gold.

Data on Thursday showed that US private employers hired the fewest number of workers in three-and-half years in August, while the number of Americans filing new applications for jobless benefits declined last week.

Elsewhere, Perth Mint’s gold product sales edged higher last month, while silver sales slid more than 30% on a monthly basis.

Among other metals, spot silver fell 0.2% to $28.75/oz, while platinum gained 0.4% to $928.23. Palladium fell 0.1% to $940.11 and was headed for a weekly loss. 

Reuters