Gold prices were broadly flat on Friday, as higher U.S. Treasury yields offset support from a weaker dollar, while investors awaited key inflation data for signals on the Federal Reserve’s policy path ahead of its meeting next week.
Spot gold held its ground at $4,215.92 per ounce, as of 0524 GMT, and was on track for a 0.3 per cent weekly decline. U.S. gold futures for December delivery edged 0.1 per cent higher to $4,245.70 per ounce.
Gold prices: Market Dynamics at Play
The benchmark 10-year U.S. Treasury yields hovered near their highest levels in more than two weeks, applying downward pressure on gold prices. The dollar languished close to a five-week low against its major peers, making gold more attractive to overseas buyers.
Investor Sentiment and Anticipation
“So the market is waiting for fresh triggers which can come in the form of what the Fed is going to do and (gold) is just consolidating after a brief run in the month of November, but the trend going forward looks to be on the upside,” stated Kunal Shah, head of research at Nirmal Bang Commodities. He noted that higher Treasury yields were also contributing to the pressure on gold prices.
Economic Indicators and Fed Speculation
Recent U.S. data revealed jobless claims fell to 191,000 last week, the lowest in more than three years and well below the 220,000 forecast. Additionally, ADP figures showed private payrolls fell by 32,000 in November, marking the sharpest drop in over two and a half years.
A majority of more than 100 economists polled by Reuters anticipate that the Fed will reduce its key interest rate by 25 basis points at its December 9-10 meeting, as the central bank seeks to support a cooling labour market. Lower interest rates typically favour non-yielding assets like gold.
Looking Ahead: Key Inflation Data
Investors are keenly awaiting the delayed September Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, which is due at 1500 GMT. This report could provide critical insights into future monetary policy decisions.
Performance of Other Precious Metals
In other precious metals, silver rose 1 per cent to $57.68 per ounce and was on track for a weekly gain, having climbed to a record high of $58.98 on Wednesday. Platinum edged 0.1 per cent lower to $1,644.04 and was also set for a weekly loss, while palladium gained 1.1 per cent to $1,464.70 but was poised to end the week higher.
