Gold set for weekly dip with resilient US economy in focus

Gold prices firmed on Friday (Sep 8) but were set for a weekly decline as the US dollar and Treasury yields held firm with strong US economic data raising concerns of the Federal Reserve keeping interest rates higher for longer.

Spot gold was up 0.2 per cent at US$1,922.87 per ounce, as at 0116 GMT, but set for a 0.8 per cent weekly fall. US gold futures rose 0.2 per cent to US$1,946.90.

The US dollar was headed for its longest weekly winning streak in nine years, bolstered by a resilient run of US economic data.

New filings for state unemployment benefits fell unexpectedly last week to the lowest level since February, data showed on Thursday.

US Treasury yields declined on Thursday, as a move higher following the jobs data proved to be short-lived, with investors scanning comments from a host of Fed officials.

New York Fed president John Williams kept his options open over future US interest rate policy, acknowledging falling inflation and a better balanced economy, which suggests there is no urgency for a rate rise later this month.

Chicago Fed president Austan Goolsbee said getting the economy on the “golden path” – where inflation falls but recession is avoided – is possible, but not a guarantee.

Dallas Fed president Lorie Logan said while it “could be appropriate” to skip an interest-rate increase in September, more policy tightening will likely be needed to get inflation down to 2 per cent in a timely way.

China held 69.62 million fine troy ounces of gold at the end of August, up from 68.69 million ounces at the end of July, data showed.

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Elsewhere, spot silver rose 0.2 per cent to US$23.01 per ounce and platinum gained 0.3 per cent to US$906.14. However, both were set for their worst weeks since Jun 23.

Palladium was up 0.2 per cent at US$1,214.83, but on course for its fourth consecutive weekly fall. REUTERS