Gold futures on Friday were on pace to halt a seven-session string of daily gains as investors turned from the perceived safety of precious metals to equities, ahead of a closely watched U.S. jobs report.
August gold on Comex GCQ19, -0.18% lost $3.40, or 0.3%, to $1,339.30 an ounce, on track to halt the longest daily win streak since Jan. 5, 2018, but the yellow metal was on poised for the best weekly gain, up 2.4%, since the week ended Aug. 24, according to FactSet data, based on the most-active contracts.
“The yellow metal is poised for another major move higher if we see further dollar weakness. Fed cut rate bets have been on an upward trajectory and that could be confirmed if we see the strongest part of the U.S. economy, the labor market show signs of weakness. ” wrote Edward Moya, senior market analyst at Oanda, in a daily research note.
The move this week for precious metals comes as trade tensions between the U.S. and its international counterparts prompted Federal Reserve Chairman Jerome Powell earlier this week to suggest that an interest-rate reduction may be appropriate if tariff disputes weaken economic growth— a felicitous environment for gold to gain amid lower rates and flight-to-safety bets.
A report on jobs may help guide Fed policy. The economy likely added 185,000 new jobs in May, keeping the U.S. unemployment rate at nearly 50-year low of 3.6%, according to economists polled by MarketWatch.
Read: U.S. needs a good jobs report and Wall Street forecasts one
Global stocks were climbing, with futures for the Dow Jones Industrial Average DJIA, +0.71% YMM19, +0.24% and the S&P 500 index SPX, +0.61% ESM19, +0.26% pointing to a positive start, while the dollar, as gauged by the ICE U.S. Dollar Index DXY, +0.01% was edging up. Both factors that can undercut appetite for gold because investors tend to shun gold when stocks are climbing and a strengthening U.S. currency can make precious metals comparatively more expensive to buyers using other monetary units.
Meanwhile, July silver SIN19, +0.07% edged down by a penny, or less than 0.1%, to $14.890 an ounce, after gaining 0.8% on Thursday. The metal is set for its sharpest weekly gain, up 2.3%, since the week ended Dec. 28.
Add Comment