Gold prices struggled for momentum on Friday as investors exercised caution ahead of a crucial report on U.S. October non-farm payrolls. This report is expected to provide further insights into the Federal Reserve’s future interest rate decisions.
Spot gold exhibited minimal movement, remaining nearly unchanged at $1,986.72 per ounce as of 0304 GMT, while U.S. gold futures showed little variation, hovering at $1,994.30.
Bullion was on the verge of ending a three-week winning streak, with a weekly decline of nearly 1%. This decline came after prices surged past the critical $2,000-per-ounce threshold last week, driven by escalating tensions in the Middle East that boosted safe-haven demand.
City Index senior analyst Matt Simpson commented on the recent gold price movements, stating, “If you step back and look at what’s happened over the last few weeks, you have like a 10% rally on gold prices in 10 days. That’s a very strong move… where you kind of need a natural pause in that trend, and that’s where (gold) is at the moment.”
In alignment with market expectations, the Federal Reserve maintained its current interest rates during its recent meeting, prompting investors to speculate that the central bank may have concluded its rate hikes. This development led to a decrease in the value of the U.S. dollar and Treasury yields.
Investor attention now turns to the upcoming release of the U.S. non-farm payrolls data, scheduled for 1230 GMT. It is anticipated that this report will indicate the addition of 180,000 jobs in the previous month. Simpson added that the jobs report would need to deliver surprisingly weak figures to exert further downward pressure on Treasury yields and propel gold prices above the $2,000-per-ounce mark.
Recent data from Thursday revealed a moderate increase in the number of Americans filing new claims for unemployment benefits. Markets are currently pricing in an 80% likelihood that the Federal Reserve will leave rates unchanged in December, according to the CME FedWatch tool. Higher interest rates are known to increase the opportunity cost of holding gold.
In other precious metal news, spot silver exhibited minimal change at $22.74 per ounce, platinum saw a 0.4% rise to $922.87, and palladium experienced a notable climb of 1.6%, reaching $1,116.57.
