BENGALURU: Gold prices gained on Friday and hovered around the key $2,000 mark as US dollar and Treasury yields slipped after a weak US job data cemented expectations that the Federal Reserve is done raising interest rates.
Spot gold ticked up 0.8% to $2,000.64 per ounce by 9:05 ET (1305 GMT), after hitting a session high of $2,003.69. US gold futures rose 0.7% to $2,008.10.
US job growth slowed more than expected in October, while wage inflation cooled, pointing to an easing in labour market conditions. Data showed employers added 150,000 jobs in October, below the 180,000 expected by economists.
“If the labour market starts to deteriorate, the Fed will be unable to continue a hawkish path. The data cements the idea of a Fed pause, which is helping gold,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. Higher rates increase the opportunity cost of holding zero-yield bullion.
Adding to gold’s shine, the dollar index fell 0.8% and benchmark 10-year US Treasury yields fell to three-week lows after the data. Traders are now pricing in an 90% chance that the US central bank will leave rates unchanged in December compared to 80% before the data, according to the CME FedWatch tool.
Tai Wong, a New York-based independent metals trader, said price action on Friday will tell if gold needs to consolidate a bit or if its full steam ahead, in any case there is no good news for gold bears at the moment.
On the physical front, gold dealers in India offered discounts for a fourth consecutive week as consumers shied away from making purchases due to higher domestic prices.
Elsewhere, spot silver was up 1.6% at $23.1 per ounce and was on track for its second straight weekly loss. Platinum rose 1% to $928.82, heading for its fourth consecutive weekly rise. Palladium climbed 2.4% to $1,125.83.