Gold prices hovered around the key $1,700
level on Friday ahead of a key U.S. labor data announcement,
but the metal faces a third consecutive weekly loss on bets that
the Federal Reserve will retain its aggressive rate-hike stance.
Spot gold rose 0.3% to $1,701.50 per ounce by 0639
GMT, but was down 2% for the week so far.
U.S. gold futures were up 0.1% at $1,711.60.
The dollar index inched 0.1% lower but was not far
from 20-year peak scaled in the previous session.
A weaker-than-expected data could offer a temporary respite
from gold selling, said Stephen Innes, managing partner at SPI
However, “the market is still really playing on a
higher-for-longer U.S. interest rate narrative.”
U.S. non-farm payrolls data is due at 1230 GMT and is likely
to show 300,000 jobs were added in August and could signal
persistent labor market strength and cement expectations of a
75-basis-point rate hike this month.
Data on Thursday showed the number of Americans filing new
claims for unemployment benefits fell to a two-month low last
week, while layoffs dropped in August.
While U.S. manufacturing grew steadily last month, factory
activity in China, the euro zone and Britain fell fanning
concerns over a slowdown.
“Although China is struggling with COVID-19, there is no
safe-haven demand… Safe-haven demand is going dollar’s way,”
said Jigar Trivedi, senior analyst currency and commodity
analyst at Mumbai-based Reliance Securities.
“Decline is seen in investment demand also… Holdings at
the SPDR Gold Trust was around 1,006 tonnes at the beginning of
August and is now at 973 tonnes.”
Even though gold is seen as a hedge against inflation and
economic uncertainties, higher interest rates increase the
opportunity cost of holding the bullion.
Spot silver rose 0.2% to $17.89 per ounce, platinum
gained 0.3% to $830.45 and palladium climbed 1.4%
to $2,040.72. They were also headed for a third consecutive
(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi
Aich and Uttaresh.V)