Gold steady ahead of US non-farm jobs report

Gold struggled for momentum on Friday, as investors refrained from making big bets ahead of a report on US October non-farm payrolls that could offer more clues to the Federal Reserve’s interest rate path.

Spot gold was almost flat at $1,986.72/oz by 3.04am GMT and US gold futures were little changed at $1,994.30.

Bullion was set to snap a three week-winning streak, having declined nearly 1% for the week so far. Prices rose above the key $2,000/oz level last week, after escalating tensions in the Middle East boosted safe-haven demand.

“If you step back and look at what’s happened over the last few weeks, you have like a 10% rally on gold prices in 10 days. That’s a very strong move … where you kind of need a natural pause in that trend and that’s where [gold] is at the moment,” City Index senior analyst Matt Simpson said.

In line with market expectations, the Fed held rates steady on Wednesday, and investors raised bets that the US central bank may have concluded rate hikes, sending the dollar and Treasury yields lower.

Market focus now shifts to US non-farm payrolls data, due at 12.30pm GMT, which is expected to show that employers added 180,000 jobs last month.

The jobs report needs to deliver some surprisingly weak figures to weigh further on Treasury yields and push gold prices above the $2,000/oz mark, Simpson said.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits increased moderately last week.

Markets are now pricing in about an 80% chance that the Fed will leave rates unchanged in December, according to the CME FedWatch tool.

Higher interest rates raise the opportunity cost of holding gold.

Spot silver was flat at $22.74/oz, platinum rose 0.4% to $922.87 and palladium climbed 1.6% to $1,116.57.

Reuters