Gold firmed on Friday as the dollar came slightly off two-decade highs, but bullion was set to post its biggest weekly drop in more than a month as the elevated greenback hit demand.
FUNDAMENTALS
* Spot gold firmed 0.3% to $1,744.07 per ounce by 0106 GMT. U.S. gold futures rose 0.2% to $1,742.50.
* The dollar edged down from 20-year highs, taking some weight off greenback-priced gold.
* Gold prices have lost about 3.7% this week. It is likely to be their fourth straight weekly fall, and worst since mid-May.
* U.S. equities rose with Treasury yields overnight, as investors bet on economic light at the end of the Federal Reserve’s rate hiking tunnel, while oil prices rose on supply concerns.
* Benchmark U.S. 10-year Treasury yields dipped on Friday, buoying gold.
* The number of Americans filing new claims for unemployment benefits unexpectedly rose last week and there are growing signs that demand for labour is cooling, with layoffs surging to a 16-month high in June, as the Federal Reserve’s aggressive monetary policy tightening stokes recession fears.
* Two of the Fed’s most vocal hawks on Thursday said they would support another 75 basis-point interest rate increase later this month but a downshift to a slower pace afterward, even as both downplayed the risk of higher borrowing costs pushing the U.S into recession.
* Rising short-term U.S. interest rates and bond yields increase the opportunity cost of holding gold, which yields no interest.
* Spot silver rose 0.5% to $19.28 per ounce, and platinum gained 0.6% to $878.40, but both were set for weekly losses.
* Palladium climbed 0.8% to $2,006.51, and has gained about 2.3% for the week.
DATA/EVENTS (GMT, June)
1230 US Non-Farm Payrolls
1230 US Unemployment Rate
1230 US Average Earnings YY