Gold prices rose on Friday and were set for a weekly gain as market participants awaited the release of key U.S. jobs data that could impact the size of the expected rate cut this month.
In the UAE, gold prices rose AED0.5 with 24-carat gold inching up to AED305 and 22-carat gold rising to AED282.50. Meanwhile, 21-carat gold reached AED273.25 and 18-carat gold hit AED234.25.
Globally, spot gold rose 0.05 percent to $2,518.64 as of 5:02 GMT, after hitting a one-week high of $2,523.29 in the previous session. Gold has climbed 0.5 percent so far this week and 22 percent this year. Meanwhile, U.S. gold futures gained 0.22 percent to $2,548.70.
U.S. nonfarm payrolls
Gold prices rose ahead of the release of U.S. nonfarm payrolls (NFP) data due at 1230 GMT today. This data could provide additional insight into the health of the labor market, raising market expectations for a larger U.S. rate cut this month.
The possibility of a 50-basis-point rate cut by the Federal Reserve this month has risen from 34 percent last week to 41 percent on Friday, according to CME Group’s FedWatch tool.
Gold prices will likely rise further if the NFP data signals a weakening labor market since it will make the case for a Fed rate cut this month. Non-yielding gold’s appeal traditionally rises in a low-interest-rate environment. Moreover, gold is a safe haven asset against economic and political uncertainty.
The market expects gold prices to test a new record high this year amid rising geopolitical tensions, a weaker dollar, central bank buying, and the uncertainty surrounding the U.S. elections.
Data on Thursday revealed that U.S. private employers hired the fewest number of workers in 3.5 years in August. Meanwhile, the number of Americans filing new applications for jobless benefits declined last week.
Read: UAE’s ADNOC launches inaugural $4 billion notes offering under GMTN Program
Other precious metals
As gold prices geared up for a weekly gain, the precious metals market saw mixed movement. Spot silver declined 0.03 percent to $28.80 while platinum gained 0.87 percent to $932.20. Palladium, however, fell 0.24 percent to $938.52.
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