GOLD prices edged up on Friday (Jul 5) and were set for a second straight weekly gain, while traders awaited US employment data to gauge the trajectory of the Federal Reserve’s potential interest rate cuts.
Spot gold rose 0.2 per cent at US$2,359.73 per ounce, as at 0204 GMT and was up more than 1 per cent for the week. US gold futures was down 0.1 per cent to US$2,366.10.
The US dollar was on track for a weekly decline, making US 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’s 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 1230 GMT.
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“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 US$2,400 level,” Waterer said.
“Gold has been in consolidation mode above US$2,300, which bodes well for potential further price gains once we eventually move towards a lower interest rate environment.”
Traders are currently pricing in about a 73 per cent 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.
Spot silver rose 0.4 per cent to US$30.53 and was headed for its best week since May 17.
Platinum fell 0.3 per cent to US$999.86. Palladium gained 0.4 per cent to US$1,021.75 and headed for a third consecutive weekly gain. REUTERS
