Gold prices steady, set for strong week as Fed rate fears ease

investing.com:

Investing.com-- Gold prices rose slightly on Friday and were headed for a strong weekly performance as more weak U.S. economic data spurred bets that the Federal Reserve was done raising interest rates.

The yellow metal was set for its best week since early-October, and was once again trading close to the $2,000 an ounce level after dropping sharply over the past week.

Spot gold rose 0.2% to $1,985.60 an ounce, while gold futures rose slightly to $1,988.05 an ounce by 00:06 ET (05:06 GMT).

Prices of the yellow metal were set to rise between 2.5% and 3% this week, as softer-than-expected U.S. inflation data fueled bets for a definite Fed pause.

The yellow metal also saw some safe haven demand, as weak economic prints from Japan and the euro zone pushed up concerns over a looming global recession. 

But the biggest boost to the yellow metal came on Thursday, after data showed that U.S. jobless claims grew more than expected for a fourth straight week, signaling more cooling in the labor market.

Gold prices jumped over 1% after the data, given that a cooling labor market and softer inflation are the two key factors for the Fed to consider halting its rate hike cycle. The dollar and Treasury yields tumbled after the reading.

Still, traders remained wary of bidding further on gold, given that a slew of Fed officials are set to speak on Friday. The minutes of the Fed’s October meeting are also due next week, and are likely to offer more cues on the central bank’s outlook on interest rates.

But even with a Fed pause, the central bank has repeatedly signaled it will keep rates hikes for longer- a scenario that bodes poorly for gold, given that higher rates push up the opportunity cost of investing in bullion.

Copper prices traded