LONDON: Gold eased from the previous day’s three-and-a-half-month peak on Friday as the dollar edged higher ahead of key US non-farm payrolls data due later, which will be closely watched for clues on the outlook for Federal Reserve policy.
The metal remains on track for a fourth straight weekly gain, however, for the first time since April. It has risen 1.2 per cent in the first trading week of the year, having climbed by 13 per cent in 2017.
Spot gold was down 0.4 per cent at $1,317.36 an ounce by 1225 GMT, off Thursday’s high of $1,325.86. US gold futures for February delivery were down $3 at $1,318.60.
Market participants will be closely watching Friday’s payrolls data for December for further signs of strength in the world’s biggest economy.
The report is expected to show job gains of 190,000 for last month, according to a Reuters survey. Firmer data could strengthen the case for a faster pace of US interest rate increases. That would weigh on gold, which as a non-yielding asset is highly exposed to interest rates.
“We think that the path of least resistance is skewed to the upside and the upcoming data would have to beat on so many matrices to push the gold price below the $1,300 mark,” said Think Markets chief market analyst Naeem Aslan.
“Volatility could see a big bump if we see some really dramatic colour in the US NFP number, otherwise it is [a case of] more calm sailing.”
Data from the ADP Research Institute showed on Thursday that US private employers added 250,000 jobs in December, the biggest monthly increase since March. Economists surveyed by Reuters had forecast a gain of 190,000 jobs.
Among other precious metals, palladium was down 0.2 per cent at $1,093.97, also retreating after hitting a record high of $1,105.70 on Thursday.
It was the best performer among major precious metals last year, rising 56 per cent on fears that rising demand for the autocatalyst metal would further tighten the market after years of deficit.
“Prevailing bullish sentiment and the encouraging technical trend have pushed palladium prices to record highs,” Julius Baer said in a note. “We believe this is at odds with a slowdown in global car sales growth. Related headlines should eventually cool sentiment, trigger profit-taking and lead to a price correction.”
Spot silver was down 0.5 per cent at $17.15 after touching its highest in more than six weeks at $17.27 in the previous session.
Spot platinum was 0.5 per cent higher at $964.20 an ounce. It hit a three-and-a-half-month peak at $965.40 on Thursday.