Gold prices scaled a four-week peak on Friday and were set for their best week in seven, driven by safe-haven demand amid uncertainty over what policies US President-elect Donald Trump will pursue, while markets awaited jobs data for clues on the trajectory of US interest rates, reports Reuters.
Spot gold climbed 0.4 per cent to $2,679.65 per ounce, as of 1250 GMT after hitting its highest level since Dec. 13 earlier in the session. Prices have risen by more than 1.0 per cent this week. US gold futures rose 0.6 per cent to $2,707.00.
The most bullish outcome for gold is the narrative of ballooning fiscal deficits and unsustainable debt weighing on the US dollar in the longer term and causing doubts about its role as the world's reserve currency, said Carsten Menke, analyst at Julius Baer.
Trump will take office on Jan. 20 and has vowed to implement tariffs, which could ignite trade wars and lead to inflation.
Bullion is considered a hedge against inflation, but higher interest rates blunt its appeal as it yields no interest.
The short-term focus is on the US payrolls report due at 1330 GMT. According to a Reuters survey, non-farm payrolls are expected to have increased by 160,000 in December, following a jump of 227,000 in November.
"A stronger-than-expected NFP report that further dilutes expectations for Fed rate cuts in 2025 could prompt some immediate paring of gold's recent advance. If the U.S. jobs market shows signs of cooling, perhaps allowing the Fed to ease off on its hawkish stance, that could send gold closer to $2,700," said Exinity Group chief market analyst Han Tan.
Meanwhile, gold discounts in India widened as consumers refrained from buying as local prices rose, whereas the upcoming Lunar New Year stimulated buying in other major Asian markets. [GOL/AS]
Spot silver gained 0.7 per cent to $30.33 per ounce, platinum firmed 0.3 per cent to $961.40 and palladium added 2.3 per cent to $948.04. All three metals were headed for weekly gains.
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