Gold on track for second weekly rise

Bengaluru — Gold prices firmed on Friday and were set for a second consecutive weekly gain, while traders awaited US employment data to gauge the trajectory of the Federal Reserve’s potential interest rate cuts.

Spot gold rose 0.3% at $2,363.19/oz by 5.06am GMT and was up more than 1% for the week. US gold futures gained 0.1% to $2,372.60.

The dollar was on track for a weekly decline, making dollar priced-bullion more attractive to buyers holding other currencies.

“Gold has enjoyed a productive week so far, with the precious metal being a beneficiary of some weaker US macro data,” said Tim Waterer, KCM Trade chief market analyst.

Economic data on Wednesday, including weak services and ADP employment reports, pointed to a slowing US economy. A separate report showed an increase in initial applications for US unemployment benefits last week.

Market spotlight is on the US nonfarm payrolls report due at 12.30pm GMT.

“If the jobs data misses the mark on the lower side, I expect investors will start to further fancy a possible September rate cut from the Fed, which could see gold have another crack at the $2,400 level,” Waterer said.

Traders are currently pricing in about a 73% chance of a Fed rate cut in September, according to CME FedWatch Tool.

Lower interest rates reduce the opportunity cost of holding non-yielding gold.

Analysts at NAB expect gold prices to average around $2,200/oz in 2024 before easing to $2,050 in 2025.

“Gold demand in early 2024 has been underpinned by central bank purchases — with a key priority of these institutions appearing to be the diversification of assets within their reserves,” NAB said in a note.

Spot silver rose 0.5% to $30.56 and was headed for its best week since May 17.

Platinum fell 0.3% to $999.64. Palladium gained 0.5% to $1,022.25 and was headed for a third consecutive weekly gain.

Reuters