Gold prices steady before nonfarm payrolls, weekly losses on tap
Investing.com-- Gold prices steadied on Friday as traders hunkered down before key nonfarm payrolls data, with the yellow metal headed for a weekly loss as risk appetite improved in the wake of dovish signals from the Federal Reserve.
While gold saw some relief from a drop in the dollar and Treasury yields, this was largely offset by traders dumping the yellow metal in favor of more risk-driven assets, particularly stocks and currencies.
Gold was also hit with some profit taking this week, after increased safe haven demand, following the onset of the Israel-Hamas war, saw bullion prices jump over 10% in October.
But traders were now pricing in a lower risk premium for gold, amid easing concerns that the conflict will spill over into the broader Middle East region. International attempts to broker a ceasefire furthered this notion.
Spot gold steadied around $1,986.34 an ounce, while gold futures expiring in December were flat at $1,993.70 an ounce by 00:49 ET (04:49 GMT). Both instruments were down about 1% this week.
Markets were now awaiting key nonfarm payrolls data for October, due later on Friday. The reading comes just a few days after the Fed held interest rates steady and offered middling signals on its plans for more rate hikes. This spurred a rush into risk-driven assets, as markets bet that the Fed was done with its rate hike cycle, and will begin trimming rates by mid-2024.
But the payrolls data will be closely watched, given that the Fed still left the door open for one more rate hike this year- although the move will largely depend on the trajectory of inflation and the labor market.
While analysts expect Friday’s data to show a sharp drop in payrolls, the reading has beaten expectations for six of the
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