NEW YORK: Gold was on course to fall for a fourth straight week on Friday, hurt by the dollar’s ascent and as bets for steep interest rate hikes gained traction after healthy US jobs data.
Spot gold was little changed at $1,743.69 per ounce by 11:37 a.m. ET (1537 GMT). Bullion has lost nearly 4% so far this week, which would be its worst since mid-May.
US gold futures rose 0.2% at $1,743.00.
Lately gold has failed to attract safe-haven flows despite growing recessions risks as investors have instead opted for the dollar, which has marched to fresh two-decade highs.
“The jobs data pushed down gold, already struggling after such a strong dollar rally. However, there is some bargain hunting coming through in gold here,” said RJO Futures senior market strategist Bob Haberkorn.
US job growth was more than expected in June and the unemployment rate remained near pre-pandemic lows, signalling persistent labour market strength that gives the Federal Reserve ammunition to deliver another 75-basis-point rate increase later this month.
Higher interest rates sour the appeal of gold by translating into increased opportunity cost of holding the asset since it yields no interest.
“In short-term, we still see gold supported by recession risks. Following the recent correction, we expect prices to consolidate,” said Carsten Menke, head of Next Generation Research at Julius Baer.
“A lasting rebound looks rather unlikely assuming that the Fed is able to fight inflation without pushing the economy into recession.”
In physical markets, demand improved slightly in India after domestic prices eased, while concerns over fresh coronavirus outbreaks kept a leash on activity in top consumer China.
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