Gold heads for first weekly fall in four as rate-cut hopes fade

GOLD prices were on track for their first weekly fall in four on Friday (Jan 5), as waning expectations of an early interest rate cut in the United States boosted the US dollar, while investors focussed on a key employment report due later in the day for more rate clues.

Spot gold was up 0.1 per cent at US$2,054.10 per ounce, as at 0156 GMT. It has declined about 0.8 per cent so far in the week after three straight weekly gains.

US gold futures rose 0.2 per cent to US$2,053.00 per ounce.

The US dollar index was headed for its best week since July 2023, making bullion more expensive for other currency holders.

Pointing to persistent strength in the US labour market, data on Thursday showed that weekly jobless claims fell more than expected last week and private employers hired more workers than expected in December.

US Federal Reserve officials were convinced that inflation was coming under control but noted an elevated degree of uncertainty about the rate cut outlook, minutes of the Fed’s Dec 12 to 13 meeting released on Wednesday showed.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

Market participants have tempered their expectations of monetary policy easing by the Fed, pricing in about a 65 per cent chance of a rate cut by March, compared with a 90 per cent chance a week ago, according to the CME FedWatch tool.

Investors now await the US non-farm payrolls report due at 1330 GMT for further direction.

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Gold steady as traders await jobs data for US Fed cues

Spot silver rose 0.6 per cent to US$23.13 per ounce, while platinum slipped 0.3 per cent to US$953.61.

Palladium rose 0.7 per cent to US$1,044.23 after an eight-session slide. REUTERS