Gold prices looked set to post their worst week in six on Friday as investors braced for a closely watched US jobs report after a string of solid economic data this week drove Treasury yields to nine-month highs.
Spot gold was up 0.1% at $1,935.39 per ounce and US gold futures were trading 0.1% higher at $1,970.60 by 0600 GMT.
Gold prices have declined more than 1% so far this week, having slipped to July 11 lows on Thursday as long-term US Treasury yields climbed to their highest since November after employment and other economic data pointed to easing inflation.
The US economy’s resilience has led to growing expectations that the Federal Reserve will continue to raise interest rates, further weighing on gold, said Vandana Bharti, assistant vice-president of commodity research at SMC Global Securities.
Spot gold may rise into $1,992-$2,003 range before falling
Non-farm payrolls (NFP) data due at 1230 GMT will be the next focus for further clues about the US economy’s strength.
“For gold to start making some forward progress we will likely need to see an adverse reaction of the dollar to the NFP figures,” said Tim Waterer, chief market analyst at KCM Trade.
“But for the meantime, gold is trading tightly and without much spark, mostly because it’s losing out in terms of relative yield attractiveness.” Rising bond yields dampen the appeal of gold, which pays no interest.
The Bank of England also warned on Thursday that borrowing costs were likely to stay high for some time.
On a technical basis, Kelvin Wong, senior market analyst, Asia Pacific, OANDA, sees key near-term support for gold at $1,925, a fall below which exposes the metal to its 200-day moving average at $1,895.
Among other metals, spot silver fell 0.1% to $23.54 per ounce and platinum was nearly flat at $914.50. Both were set for their third consecutive weekly loss.
Palladium dropped 0.7% to $1,249.54, but was on track for a small weekly rise.
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