Gold prices edge higher but set for second straight weekly drop

REUTERS: International gold prices edged higher on Friday but headed for a second straight week of decline, while market participants braced for the US payrolls data that is expected to provide cues on the interest rate cut trajectory.

Spot gold rose 0.3 per cent to $2,638.66 per ounce by 0346 GMT after hitting its lowest since Nov. 26 earlier in the session. Prices are down about 0.4 per cent so far this week.

US gold futures rose 0.5 per cent to $2,661.00.

“For December, support is around $2,550 and resistance at $2,700. Undertone will be bearish for a couple of weeks as we expect profit booking due to a massive rally this year,” said Jigar Trivedi, a senior analyst at Reliance Securities.

Spot gold hit a record high of $2,790.15 on Oct. 31.

“The dollar is expected to rally further and we don’t expect any escalation of the geopolitical tensions either.”

The US payrolls report is due at 1330 GMT. Non-farm payrolls likely increased by 200,000 jobs in November after rising by 12,000 in October.

Data on Thursday showed the number of Americans filing new applications for unemployment benefits rose slightly last week, pointing to steadily easing labour market conditions heading into the final stretch of 2024.

Markets currently see a 70.1 per cent chance of a 25-basis-point Federal Reserve rate cut this month, according to the CME Group’s FedWatch Tool,

Fed Chair Jerome Powell on Wednesday said the US economy was stronger than it had appeared in September, when the central bank began cutting rates, allowing policymakers to potentially be a little more cautious in reducing rates further.

Higher rates dull non-yielding bullion’s appeal.

Spot silver dipped 0.1 per cent to $31.3 per ounce but is up more than 2 per cent for the week.

Platinum rose 0.6 per cent to $944.25 and palladium rose 1.5 per cent to $977.25. Both metals are set for second straight weekly losses.

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