Gold on track for seventh consecutive weekly gain

Gold prices edged higher on Friday and were on track for a seventh consecutive weekly gain, as investors awaited US employment data that could influence expectations about aggressive policy easing by the Federal Reserve.

Spot gold was up 0.2% at $1,418.25/oz as of 4.01am GMT, rising nearly 0.7% so far this week.

US gold futures were steady at $1,420.80/oz.

“We have a key event tonight for the global economy that is US non-farm payrolls numbers. If they come in weaker than expected, we will see confirmation of one of the key supports for gold that is lower interest rate environment,” said Michael McCarthy, chief market strategist at CMC Markets.

All eyes are on the US non-farm payrolls (NFP) data due later in the day, which economists expect to have risen by 160,000 in June, compared with a rise of 75,000 in May.

The Fed holds its two-day policy meeting on July 30-31 and futures are fully pricing in a 25 basis point cut.

The Fed is not alone in embarking on easier monetary policy. Australia’s central bank has cut its cash rate by 50 basis points since June while leaving the door ajar for a third move this year.

“Gold should do well coming out of NFP as one positive payroll print should not change the sense of urgency central banks around the world must feel,” said Stephen Innes, managing partner at Vanguard Markets.

Bullion has gained more than 12%, or $150, since touching its 2019 low of $1,265.85 in early May, driven by a dovish outlook from major central banks and an escalation in tensions between the US and Iran.

Source: businesslive.co.za