Gold prices are set for their most significant weekly gain in nine weeks as the dollar and Treasury yields retreat, creating an optimistic environment for the precious metal. Traders are eagerly anticipating crucial U.S. jobs data for insights into the potential timing of Federal Reserve rate cuts.
As of 0803 GMT, spot gold remained steady at $2,055.59 per ounce, marking nearly a 2% climb for the week and positioning itself for the most substantial weekly gain since early December. U.S. gold futures inched 0.1% higher to $2,072.70.
Brian Lan, a representative from Singapore-based dealer GoldSilver Central, commented on the Federal Reserve’s stance, saying, “Fed is unlikely to cut rates in March, but market participants are sure that it’s going to start cutting rates after that… the remarks were bullish for gold.” Lower interest rates enhance the appeal of non-yielding bullion.
The positive sentiment for gold was reinforced on Thursday, with a nearly 1% surge in response to U.S. Labor Department data revealing higher-than-expected initial jobless claims. Another report indicated faster-than-expected growth in U.S. worker productivity for the fourth quarter.
Investor attention is shifting to the U.S. non-farm payrolls data scheduled for release at 1330 GMT. The backdrop of concerns over the regional banking sector in the U.S. has heightened the appeal for safe-haven assets, including bullion and Treasury bonds.
Yields on benchmark 10-year Treasury notes, correlated inversely to bond prices, remained close to their lowest levels observed in 2024. The dollar index showed a 0.4% decline for the week.
Federal Reserve Chair Jerome Powell has pushed back against the notion of an interest rate cut in the spring but expressed confidence in inflation moving towards the desired 2% range. Market indicators, however, reflect a high level of certainty among traders about a rate cut in May, according to money market pricing.
Other precious metals mirrored a relatively flat trend, with spot silver at $23.18 per ounce, platinum at $913.18, and palladium at $962.50. The positive momentum in the gold market underscores the precious metal’s resilience as a safe-haven asset, particularly in times of economic uncertainty and evolving monetary policies.