Gold set for best week since August; US jobs data eyed

Fri Dec 07 2018

Gold prices rose slightly on Friday and were headed for their best week in 15, as the dollar weakened following a decline in US Treasury yields, while investors awaited US non-farm payroll data for clues about the health of the world's top economy.

Spot gold was up 0.1 per cent at $1,239.24 per ounce, as of 0125 GMT, having hit a near five-month peak at $1,244.32 per ounce in the previous session. US gold futures were up 0.1 per cent at $1,244.6 per ounce.

The dollar index inched lower, weighed down by worries about lower US long-term Treasury yields and expectations of a fewer rate hikes by the US central bank.

Atlanta Federal Reserve bank president Raphael Bostic had on Thursday said he felt the Fed should continue raising rates towards a “neutral” level, noting that despite recent market volatility and increasing uncertainty, he did not see “any indications of a material weakening in the macroeconomic data at the moment’’.

The US economy is “performing very well overall,” Federal Reserve Chairman Jerome Powell said, capping a week of widespread market nervousness with a reminder that the US economy continues to expand.

Asian share markets tried to find their footing on Friday as speculation the Federal Reserve might be “one-and-done” with US rate hikes helped salve some wounds after a punishing week.

Gold-backed exchange-traded funds (ETFs) registered inflows in all the world's major regions in November, as volatile stock markets fuelled flight-to-safety buying, the World Gold Council had said on Thursday.

Markets face a test from US payrolls data later in the session amid speculation the economy was heading for a tough patch after years of solid growth. US oil prices stabilised on Friday, buoyed by a fall in US crude oil inventories, but the sentiment remained weak as producer group OPEC postponed a final decision on output cuts, awaiting support from non-OPEC heavyweight Russia.

Most industrial metals prices fell on Thursday and copper hit a three-week low after the arrest of a top Chinese executive in Canada dampened hopes for a resolution to the US-China trade conflict. The US trade deficit jumped to a 10-year high in October as soybean exports dropped further and imports of consumer goods rose to a record high.

Source: Reuters