Gold prices steady ahead of payrolls report, copper boosted by China

investing.com:

Investing.com-- Gold prices moved little on Friday, steadying near three-week highs as markets awaited more cues on U.S. monetary policy from nonfarm payrolls data due later in the day, while copper prices rose on positive Chinese factory data.

The yellow metal had a strong run-up this week as a string of weak U.S. economic readings spurred bets that the Federal Reserve will keep rates on hold in September, which in turn dented the dollar.

But the greenback rebounded on Thursday after data showed personal consumption expenditures — the Fed’s preferred inflation gauge- remained sticky in July, while personal spending grew more than expected. This saw gold consolidate some weekly gains.

Spot gold steadied at $1,940.14 an ounce, while gold futures expiring in December were flat at $1,966.55 an ounce by 00:59 ET (04:59 GMT). Both instruments were still trading up between 1% and 3% for the week. 

Focus is now squarely on nonfarm payrolls data for August, due later in the day. While the reading is expected to have weakened from the prior month, markets still remained on edge over any potential upside, given that payrolls have consistently beaten expectations so far this year.

Any signs of strength in the labor market, coupled with sticky inflation, gives the Fed more headroom and impetus to keep interest rates higher. While the central bank may not hike rates in September, it is still expected to keep interest rates at over 20-year highs for longer.

Rising rates had battered gold through the past year as the opportunity cost of investing in non-yielding assets increased. The yellow metal’s near-term prospects are also dimmed by rates likely remaining higher for longer. 

Stronger-than-expected eurozone inflation data also