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Gold steady near 7-week highs ahead of US jobs data

Spot gold was flat at $1,267.91 an ounce by 1201 GMT

Gulf News

LONDON: Gold steadied on Friday near a seven-week high as the dollar traded at near 15-month lows in the wake of weak US data and political turmoil in Washington, though traders were mostly biding their time ahead of key US jobs data due later.

Data late on Thursday showed a much sharper than expected slowdown in growth in the US services sector. Meanwhile, news broke that a grand jury will investigate allegations of Russian meddling in November’s US election.

Markets are awaiting July’s US employment report due later in the session for further clues on the state of the world’s largest economy and the implications for the Federal Reserve’s monetary policy.

Expectations of higher interest rates have receded in recent weeks, weighing heavily on the dollar and benefiting dollar-priced gold by making it cheaper for non-US investors.

“It’s the same trend we’ve seen for the last month. There’s no change. Its mainly a dollar story,” said Warren Patterson, analyst at ING.

Spot gold was flat at $1,267.91 an ounce by 1201 GMT.

It was on track to end the week up 1 per cent, having gained 2.2 per cent in July.

US gold futures for December delivery dipped 0.1 per cent to $1,273.80 per ounce.

US 10-year bond yields were pinned near one-month lows as US political turmoil has cooled expectations for growth and inflation. Falling yields reduce the opportunity cost of holding non-yielding bullion.

Spot gold may test support at $1,264 per ounce, a break below which could cause a further loss to the next support at $1,258, according to Reuters technical analyst, Wang Tao.

Silver rose 0.6 per cent to $16.71 per ounce, after falling to a one-week low in the previous session.

Platinum climbed 0.4 per cent to $964.50 per ounce, having earlier hit its highest since late April at $967.60, while palladium was flat at $885 per ounce.