Gold prices increased in early Asian trade on Friday and were set for a weekly gain, as investors anticipated the US non-farm payrolls report later in the day for new insights on the Federal Reserve’s interest rate trajectory. Spot gold increased by 0.4% to $4,103.55 per ounce by 0023, and is on course for a weekly gain of 5.9% thus far. US gold futures for December delivery held steady at $4,112.80. The US non-farm payrolls report is scheduled for release at 1330. The number of Americans filing new claims for unemployment benefits decreased to a 57-year low last week, indicating resilience in the labour market. However, uncertainty surrounding the ongoing conflict in the Middle East is limiting hiring opportunities.
On Thursday, two officials from the Federal Reserve advocated for gradual and consistent increases in interest rates to address inflation that exceeds targets. This marked the initial remarks from central bankers following the Democrats’ victory in Congress and their advancements at the state level in elections that may influence the trajectory of price pressures in the economy. Traders currently perceive a 71% likelihood of a rate increase by the Fed in December, based on CME’s FedWatch tool. Increased interest rates elevate the opportunity cost associated with holding non-yielding bullion, thereby diminishing its attractiveness to investors.
The Bank of England increased interest rates for the first time in more than three years on Thursday and cautioned that another rise was probable if the US-Iran conflict persists. The European Central Bank is examining indicators to determine if an interest rate increase will be necessary next month, following its decision to maintain rates in October, stated the bank’s outgoing President Christine Lagarde on Thursday. Goldman Sachs has revised its end-2026 gold price forecast down to $4,150 per ounce from $4,650, attributing this change to the recent implications of the US Federal Reserve’s more hawkish policy stance.
Poland’s central bank has achieved its goal for gold reserves, totalling 700 metric tonnes, as announced by Governor Adam Glapinski on Thursday, while also indicating the possibility of additional acquisitions. Among other metals, spot silver increased by 0.5% to $52.01 per ounce, platinum remained relatively stable at $1,517.20, and palladium held steady at $1,031.01. All three metals were on track for weekly increases.
