Gold freezes ahead of US jobs test but still set for weekly gains

Gold prices were in a tight range on Friday as investors awaited a U.S. employment report that could affect the trajectory of the Federal Reserve's rate hike.

 

However, thanks to the depreciation of the dollar and the yield of US Treasury bonds, gold is still on track for the best week since March.

 

Spot gold remained at about the same level at $1,710.30 per ounce. This week, prices rose by about 3.3%.

 

U.S. gold futures were down 0.2% at $1,718.10.

 

"We have data on employment in the non-agricultural sector of the United States, and this will be a very important point, because recently market expectations have shifted towards easing the Fed's course towards tightening monetary policy," said Ricardo Evangelista, senior analyst at ActivTrades.

 

The jobs report is due Friday, and economists predict 250,000 jobs were created last month.

 

Fed officials are sticking to their hawkish stance in the fight against high inflation, and more favorable-than-expected employment data will give rise to another significant rate hike at the upcoming central bank meeting, analysts say.

 

Although gold is considered a hedge against inflation, rising rates in the U.S. reduce the attractiveness of non-income bullion and raise the dollar.

 

"The main obstacle is our expectation that the Fed will continue to raise rates longer than the market predicts, which will lead to an appreciation of the US dollar and to the fact that gold/other asset classes will remain afloat or fall in price," said Michael Langford, director of corporate consulting firm AirGuide.

 

"In the short term, we believe that gold prices will fall below $1,700 per ounce."

 

Silver fell 0.1% to $20.63 an ounce, the biggest weekly gain since July, up more than 9% to date.

 

Platinum rose 0.5% to $926.60 an ounce and reached its best weekly rate since February 2021. Palladium rose 0.7% to $2276.01.