Gold prices experienced a modest increase on Friday, positioning themselves for the strongest weekly performance in three months. This uptick is underpinned by rising anticipations of a potential U.S. interest rate cut this month, with market focus shifting towards the forthcoming U.S. non-farm payrolls data scheduled for release later in the day.
Spot gold increased by 0.1% to $3,550.41 per ounce, as of 0057 GMT, remaining close to its all-time high of $3,578.50 reached on Wednesday. Bullion has experienced an increase of 3% thus far this week. U.S. gold futures for December delivery increased by 0.1% to $3,609.10. Data released on Thursday indicated that the number of Americans submitting new applications for jobless benefits rose more than anticipated last week, aligning with the trend of a weakening labor market. Furthermore, U.S. private payrolls experienced an increase that fell short of expectations in August. This week, multiple Federal Reserve officials indicated that ongoing concerns regarding the labor market persistently influence their outlook on forthcoming rate cuts. Fed Governor Christopher Waller expressed his belief that the U.S. central bank ought to implement cuts at its upcoming meeting.
Traders are currently anticipating an almost certain probability of a 25-basis-point reduction in the Federal Reserve’s interest rate at the conclusion of the two-day policy meeting on September 17. Non-yielding gold generally exhibits strong performance in an environment characterized by low interest rates. Attention will also be directed towards the U.S. non-farm payrolls data, scheduled for release at 1230 GMT, which may provide further insight into the Federal Reserve’s interest rate path. The August non-farm payrolls are projected to increase by 78,000 jobs, compared to a growth of 73,000 in July.
Poland’s central bank Governor Adam Glapinski announced on Thursday his intention to propose raising the target for gold as a percentage of reserves from the current 20% to 30%. Elsewhere, spot silver increased by 0.1% to reach $40.70 per ounce. Platinum increased by 1.1% to $1,382.18, while palladium experienced a modest rise of 0.1% to $1,129.12.