Gold steady but on track for second weekly fall

Bengaluru — Gold prices were poised for a second consecutive weekly decline, though bullion held steady on Friday as investors remained cautious ahead of the US nonfarm payrolls data that could provide cues on the Federal Reserve’s rate cut timeline.

Spot gold held its ground at $2,306.84/oz by 4.57am GMT but lost more than 1% this week. Prices have fallen over $120 after hitting a record high of $2,431.29 earlier in April.

US gold futures firmed 0.3% at $2,315.70.

“The big decline over the last two weeks was due to fading concerns of geopolitical risks and hawkish repricing” in rates markets, said OCBC FX strategist Christopher Wong.

A renewed push led by Egypt to revive stalled negotiations between Israel and Hamas has raised expectations that a ceasefire agreement could be in sight.

The Fed on Wednesday indicated it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings that could make those rate cuts a while in coming. Markets are pricing a 73% chance of a rate cut in November, as per CME’s FedWatch Tool.

Bullion is considered an inflation hedge, but elevated interest rates reduce the appeal of the non-yielding asset.

Softer US payrolls print could provide support for gold but a better report may weigh on prices, Wong said.

The nonfarm payrolls report is due at 12.30pm GMT.

Spot gold is biased to break resistance at $2,311 and climb to a range of $2,325-$2,351, according to Reuters technical analyst Wang Tao.

Spot silver rose 0.1% to $26.73 but was down nearly 2% for the week.

As silver dipped back towards the $25-$26 breakout area, watch out for a bullish reversal sign, the metal was going to find its feet again around these levels and maybe see more gains in 2024, Fawad Razaqzada, market analyst at City Index said in a note.

Platinum gained 0.5% to $954.67 and headed for a weekly rise. Palladium fell 0.4% to $932.21.

Reuters