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Gold set for best week since August, U.S. jobs data eyed

Reuters  |  BENGALURU 

By Suresh Namboothiri

BENGALURU (Reuters) - Gold prices edged higher on Friday and were on track for their best week in 15, as the dollar weakened on renewed speculation of an imminent pause in the U.S. Federal Reserve's tightening cycle.

Markets now await U.S. nonfarm payrolls data, expected at 0830 ET (1330 GMT), for clues about the health of the world's biggest economy which could influence the Fed's monetary policy.

U.S. unemployment and wage data are also expected on Friday.

"Gold investors will be looking towards the (U.S. nonfarm) payroll data for indications on the Fed's monetary policy stance," said Brian Lan, at GoldSilver Central in Singapore, adding that investors will take speculative positions ahead of the data.

Spot gold climbed 0.1 percent to $1,238.37 per ounce at 0717 GMT, having hit a near five-month peak at $1,244.32 per ounce in the previous session. With a rise of nearly 1.5 percent this week, gold looked set to clock its best gain since the week of Aug. 24.

U.S. gold futures were also marginally higher at $1,243.8 per ounce.

Gold participants were hopeful after reported that Federal Reserve officials were considering whether to signal a new wait-and-see mentality after a likely interest rate increase at their meeting in December.

"Gold is sensitive to monetary policy changes," said Mark To, the at Wing Fung Precious Metals in Hong Kong. "If there is a slowing down in interest rate hikes, I think by the end of this year $1,250 to $1,260 should be easily reachable for gold."

Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.

"Gold has been trading sideways for the past few days and are looking for some clarity," said a Hong with context to Fed's monetary policy stance.

"We are trading at $1,240 with resistance at $1,245 and steady support."

Meanwhile, the dollar index struggled, pressured by worries about lower U.S. long-term treasury yields, with an inversion of the yield curve signalling a sharp economic slowdown or even a recession down the road.

Asian shares fought to sustain the slimmest of recoveries as the arrest of maker Huawei's further soured Sino-U.S. relations.

Gold-backed exchange-traded funds registered inflows in all the world's major regions in November, as volatile stock markets fuelled flight-to-safety buying, the said on Thursday.

Silver was unchanged at $14.47 per ounce, while palladium slipped 1 percent to $1,197.76 per ounce.

Platinum rose marginally to $787.30 per ounce, extending losses into a fifth successive week. Platinum has slipped around 1.3 percent this week.

(Reporting by Suresh Namboothiri in Bengaluru; Editing by and Gopakumar Warrier)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, December 07 2018. 17:46 IST