May 3 (Reuters) – Gold prices were set for a second
consecutive weekly fall, even as bullion traded almost flat on
Friday as investors refrained from taking big positions ahead of
U.S. non-farm payrolls data that could offer more cues on the
Federal Reserve’s policy path.
FUNDAMENTALS
* Spot gold was nearly unchanged at $2,302.51 per
ounce, as of 0046 GMT. Prices were down more than 1% this week.
* U.S. gold futures were flat at $2,310.40 per
ounce.
* The non-farm payrolls report is due at 1230 GMT.
* The U.S. central bank held interest rates steady on
Wednesday and indicated it is still leaning towards eventual
reductions in borrowing costs, but put a red flag on recent
disappointing inflation readings that could make those rate cuts
a while in coming.
* Bullion is known as an inflation hedge, but elevated
interest rates reduce the appeal of holding the non-yielding
asset.
* Data on Thursday showed the number of Americans filing new
claims for unemployment benefits held steady at a low level last
week, pointing to a still fairly tight labor market that should
continue to underpin the economy in the second quarter.
* SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, said its holdings fell 0.17% to 829.60
tonnes on Thursday from 831.04 tonnes on Wednesday.
* Spot silver fell 0.2% to $26.65 per ounce and was
down nearly 2% for the week.
* Platinum gained nearly 0.8% to $957.15 and was on
track for a weekly gain. Palladium edged up 0.2% to
$937.57.
DATA/EVENTS (GMT)
0830 UK S&P Global PMI: Composite – Output April
0830 UK Reserve Assets Total April
0900 EU Unemployment Rate March
1230 US Non-Farm Payrolls April
1230 US Employment Rate April
1345 US S&P Global Comp, Svcs Final PMI April
1400 US ISM N-Mfg PMI April
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by
Subhranshu Sahu)
Insight:
Investors often closely watch the U.S. non-farm payrolls data as it provides crucial information about the health of the labor market, influencing the Federal Reserve’s decisions on interest rates. Any surprises in the report can lead to significant movements in the gold market.
Market Trends:
Interest rates play a significant role in shaping the demand for gold. While gold is considered a safe-haven asset in times of economic uncertainty, elevated interest rates can deter investors due to the opportunity cost of holding non-yielding assets. This dynamic can sometimes lead to inverse relationships between gold prices and interest rate movements.
