Gold rose above the important
psychological level of $1,700 on Friday as the dollar paused
while investors awaited key U.S. jobs data, amid expectations
the Federal Reserve would continue with steep interest rate
hikes in coming months.
Spot gold rose 0.5% to $1,704.40 per ounce by 1116
GMT. The metal was down about 2% for the week so far, having
touched a six-week low of $1,687.60 on Thursday.
U.S. gold futures were up 0.4% to $1,715.50.
“The dollar is somewhat lower this morning which is helping
gold regain lost ground after yesterday’s decline. There might
also be some bargain hunting in the market after prices dropped
to $1,700,” Carsten Menke, an analyst with Julius Baer said.
But overall sentiment in the gold market has turned bearish
and prices could easily drop back below $1,700 should the labor
market report be better than expected as this would prompt
further dollar-driven and sentiment-driven selling, Menke added.
The dollar index dipped 0.3% but was not far from a
After a host of recent U.S. economic data confirmed that its
economy was not headed into recession, investors now wait for
the nonfarm payrolls report for August at 1230 GMT.
“Gold doesn’t have much space for a rebound as markets are
pricing in a big increase in interest rates,” said Carlo Alberto
De Casa, external analyst for Kinesis Money.
“Investors want to understand how hawkish the Fed can be and
a solid jobs data will heap more pressure on the central bank to
raise rates, which is negative for gold.”
Higher interest rates increase the opportunity cost of
holding the non-yielding bullion.
In physical markets, gold premiums jumped in top consumer
China, while a drop in local prices boosted demand in India.
Elsewhere, spot silver rose 0.2% to $17.88 per ounce,
platinum gained 0.6% to $833.47, and palladium
added 1.8% to $2,048.57.
(Reporting by Arundhati Sarkar in Bengaluru
Editing by Tomasz Janowski and Louise Heavens)