Gold on track for second weekly fall

Bengaluru — Gold prices edged higher on Friday but headed for a second consecutive week of decline, while market participants braced for the US payrolls data that is expected to provide cues on the interest rate cut trajectory.

Spot gold rose 0.3% to $2,638.66/oz by 3.46am GMT after hitting its lowest since November 26 earlier in the session. Prices are down about 0.4% so far this week. US gold futures rose 0.5% to $2,661.00.

“For December, support is around $2,550 and resistance at $2,700. Undertone will be bearish for a couple of weeks as we expect profit booking due to a massive rally this year,” said Jigar Trivedi, a senior analyst at Reliance Securities.

Spot gold hit a record high of $2,790.15 on October 31.

“The dollar is expected to rally further and we don't expect any escalation of the geopolitical tensions either.”

The US payrolls report is due at 1.30pm GMT. Nonfarm payrolls probably increased by 200,000 jobs in November after rising by 12,000 in October.

Data on Thursday showed the number of Americans filing new applications for unemployment benefits rose slightly last week, pointing to steadily easing labour market conditions heading into the final stretch of 2024.

Markets currently see a 70.1% chance of a 25 basis point (bp) Federal Reserve rate cut this month, according to the CME Group’s FedWatch Tool,

Fed chair Jerome Powell on Wednesday said the US economy was stronger than it had appeared in September, when the central bank began cutting rates, allowing policymakers to potentially be a little more cautious in reducing rates further.

Higher rates dull non-yielding bullion’s appeal.

Spot silver dipped 0.1% to $31.30/oz but is up more than 2% for the week.

Platinum rose 0.6% to $944.25 and palladium rose 1.5% to $977.25. Both metals are set for second straight weekly losses. 

Reuters