Gold prices rose slightly in seesaw trade on Friday even as the US dollar firmed after US jobs data was weaker than expected, but still strong enough to support the case for more interest rate increases. Spot gold rose 0.2 percent at $1,313.90 per ounce by 1:37 pm EDT (1737 GMT), heading for a third consecutive weekly decline, while US gold futures for June delivery settled up $2, or 0.2 percent, at $1,314.70.
Spot gold prices are poised to end the week 0.6 percent lower. The US employment data showed US job growth increased less than expected in April and the unemployment rate dropped to near a 17-1/2 year low of 3.9 percent. "This is a bit disappointing on the earnings front after the employment cost index we received last week. Still this is not enough for the Fed to pause. They will still hike in the June meeting," said Collin Martin, fixed income strategist at the Schwab Center For Financial Research in New York.
"There's a little bit of a bottoming process happening (in gold)," said John Caruso, senior market strategist at RJO Futures in Chicago. Yet gold prices straddled positive and negative territories. "This back-and-forth movement could mean we're seeing a near-term shift in the direction of trade. The dollar is a little overextended in the near-term, but still a bullish trend," Caruso added.
Next week, gold is likely to be supported as investors worry about a possible US withdrawal from the Iran nuclear accord, said Commerzbank analyst Daniel Briesemann. If Washington decides to stick with the pact by a May 12 deadline, gold could be pressured, he added. "Even if gold dips below $1,300, the past has shown that there is buying interest below that level, so we don't expect gold to drop significantly for the moment," Briesemann said.
Meanwhile, spot silver increased 0.4 percent at $16.47 an ounce, ending the week barely changed. Among platinum-group metals, mainly used for catalysts that clean pollution from car exhausts, platinum gained 0.9 percent at $908 an ounce and was on track for a third weekly fall to end the week about 0.3 percent lower. Palladium rose 0.2 percent at $963.50 per ounce, heading for a nearly 1 percent weekly drop.