Gold heads for weekly gain ahead of US payrolls data

what happened

Spot gold gained 0.4% to $4,103.55 an ounce in early Asian trade on Friday and was on track for a weekly rise of about 5.9%, according to Reuters. Investors are waiting for the US non-farm payrolls report, due at 1330 GMT, for fresh clues on where Federal Reserve interest rates are heading.

Two Fed officials on Thursday argued for modest and steady rate increases to tackle inflation above target. Traders put a 71% chance on a December rate hike, based on CME's FedWatch tool. The Bank of England raised rates for the first time in over three years, and the European Central Bank is weighing a hike next month.

why it matters

Higher rates raise the opportunity cost of holding gold, which pays no interest, so rate expectations remain the main driver for the metal. Goldman Sachs on Thursday cut its end-2026 gold forecast to $4,150 an ounce from $4,650, citing the Fed's more hawkish stance. Poland's central bank reached its 700-ton gold reserve target and left the door open to more purchases. Spot silver rose 0.5% to $52.01, while platinum and palladium were little changed.

market impact

Gold and silver: expected Fed rate hikes weigh, while safe-haven demand and central bank buying support prices.

• ↔Gold mixed — expected Fed rate hikes weigh, while central bank buying supports prices

tags

instruments