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Gold set for weekly gain

December 03, 2022 00:00:00

Gold eased into a tight range on Friday as cautious investors positioned for US jobs data, but was still bound for its second straight weekly gain on expectations of a moderation in the pace of US rate hikes, reports Reuters.

Spot gold was down 0.2 per cent at $1,799.44 per ounce by 1005 GMT, after earlier hitting its highest since Aug 10 at $1,804.46. US gold futures eased 0.1 per cent to $1,813.20.

"A number disappointing to the downside, which could further reduce the scope and scale of the Fed's tightening drive, would likely create more dollar weakness and therefore support gold prices," said Ricardo Evangelista, senior analyst at ActivTrades.

However, a surprisingly high number of new jobs created in November, which would embolden the hawks in the Fed, and create upside for the dollar, would pressure gold, Evangelista added.

Gold prices have risen 2.5 per cent so far this week, as the rival safe-haven dollar headed for a weekly loss of about 1.0 per cent. A softer greenback makes dollar-priced gold cheaper for overseas buyers.

Bullion also got a fillip from Fed Chair Jerome Powell's comments earlier this week that it was time to slow rate hikes.

Rising rates have kept a hold on gold's traditional status as an inflation hedge this year, as they translate into higher opportunity cost of holding the non-yielding metal.

"The fact that gold has been able to make significant gains in November and then carried that momentum into December illustrates the depth of support that has built up for the metal," Kinesis Money analyst Rupert Rowling said.

Spot silver fell 0.4 per cent to $22.67 per ounce, while platinum slipped 0.4 per cent to $1,037.13 but were both set for weekly gains.

Palladium lost 2.1 per cent to $1,900.40, but was on track to snap a two-week losing streak.

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