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Gold headed for a third straight weekly drop as the dollar rallied ahead of key US jobs data, which could provide further clues on the size of the Federal Reserve’s next interest-rate hike.
Bullion is trading near a six-week low as a gauge of the greenback climbed to a record on Thursday and Treasury yields continued to ascend, damping the appeal of the non-interest bearing precious metal. The jobs report later Friday is expected to show healthy payrolls growth for August and follows stronger-than-expected US manufacturing data.
Fed Bank of Atlanta President Raphael Bostic said Thursday the campaign to cool inflation was still not complete, noting that the current pace was a long way from the US central bank’s 2 percent goal. Traders increasingly anticipate another large 75 basis points rate rise to contain price pressures at the next policy decision meeting September 20-21.
“Gold is becoming a punching bag as surging Treasury yields have rejuvenated the king dollar trade,” said Edward Moya, a senior market analyst at Oanda Corp. There’s “no reprieve in sight for gold until the move higher with global bond yields is over,” he added.
Spot gold rose 0,1 percent to US$1 699.57 an ounce as of 5:29 a.m. in London, and is down 2,2 percent this week.
Prices fell to the lowest level since July 21 on Thursday. The Bloomberg Dollar Spot Index slipped 0,1 percent. Silver, palladium and platinum advanced. – Bloomberg
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