First weekly decline in four weeks for gold; US jobs data to watch

8 Dec 2023 , 11:35 AM

The dollar’s strengthening was expected to cause gold prices to drop for the first time in four weeks, but investors remained cautious on Friday as they awaited important jobs data that would help determine whether or not the US will lower interest rates by March.

Spot gold had increased by 0.2% to $2,032.36 an ounce. Nonetheless, bullion has down 1.8% this week thus far. US gold futures increased by 0.1% to $2,048.80.

Due to increased expectations of a rate cut by the US Federal Reserve, gold reached an all-time high of $2,135.40 on Monday. However, due to apprehension over the timing of the cut, the metal fell more than $100.

The dollar index was poised to end a run of three weeks without a gain.

Gold priced in greenbacks becomes more costly for holders of other currencies due to a stronger dollar.

Benchmark 10-year Treasury note yields decreased this week, but on Friday they pulled back from a three-month low.

Information released this week indicated that the U.S. labour market was progressively losing steam as rising borrowing prices reduced demand throughout the economy.

Traders got ready for the non-farm payrolls data, which was scheduled to be released at 1330 GMT, following a spike in weekly U.S. unemployment claims.

According to CME’s FedWatch Tool, traders were pricing in a 65% chance of a rate cut by March of the following year. However, a Reuters poll indicated that rates would remain stable until at least July.

Non-interest bearing bullion is typically supported by lower interest rates.

Because speculators were increasing their hopes that Japan’s ultra-low interest rates would soon come to an end, the yen continued its massive surge versus the dollar.

Spot silver increased 0.2% to $23.83 per ounce, while palladium crept up 0.5% to $974.25 per ounce and platinum climbed 0.6% to $912.31.

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