NEW YORK: Gold prices held steady on Friday, after falling over 1percent earlier in the session, as traders boosted bets on a December US interest rate cut following dovish US Federal Reserve comments. Spot gold was steady at USD4,086.57 per ounce, as of 01:48 p.m. ET (18:48 GMT), after falling more than 1percent earlier in the session. Bullion is set for a weekly gain of 0.1percent so far.
US gold futures for December delivery settled 0.5percent higher at USD4,079.5 per ounce. New York Fed President John Williams on Friday said the US central bank could still trim interest rates in the near term, without jeopardizing its inflation goal.
The comments “are certainly supportive ... it did give the gold market bulls some friendly fodder early today,” said Jim Wyckoff, senior analyst at Kitco Metals.
Traders now see a 74 percent chance of a rate cut at the Fed’s next meeting, compared to 40percent earlier in the day. The delayed jobs report showed a mixed labour market picture, with nonfarm payrolls rising by 119,000 in October, well above forecasts for a 50,000 gain, while the unemployment rate climbed to a four-year high. Gold, a non-yielding asset, tends to do well in low-interest-rate environments.
Meanwhile, other Fed members maintained a hawkish stance, with Dallas Federal Reserve President Lorie Logan calling for leaving the policy rate on hold “for a time.”
Traders are also keeping a close eye on US stock markets as “if the stock market rallies stronger today, that’s probably going to put downside pressure on gold because of the keener risk appetite in the marketplace,” Wyckoff added. Wall Street’s main indexes gained as traders boosted bets on an interest rate cut by the Fed next month following remarks from policymakers.
Meanwhile, physical gold demand across major Asian markets remained weak this week, as volatility in rates deterred potential buyers from making purchases.
Elsewhere, spot silver fell 0.4percent to USD50.39 per ounce, platinum rose 0.1percent to USD1,512.67, and palladium edged 0.2percent up to USD1,380.
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