Gold prices are on track for their first weekly gain in three as traders anticipate a potential cut in rates by the Federal Reserve. The weaker dollar and Treasury yields have made bullion more attractive, leading to a 2% gain in gold prices so far this week.
Spot gold was steady at $2,377.80 per ounce, with U.S. gold futures rising to $2,396.50. The decline in bond yields and the struggling dollar have created a favorable environment for gold, according to IG market strategist Yeap Jun Rong.
Investors are eagerly awaiting the U.S. nonfarm payrolls data due at 1230 GMT, with expectations that job growth may fall below economists’ forecasts. Any weaker labor market data could lead to an increase in gold prices, given the current economic conditions.
A recent string of weak macro data has fueled speculation that the Fed may cut rates as early as September, reducing the opportunity cost of holding gold. Metals Focus consultancy predicts another record high for gold prices this year, supported by confidence in Fed rate cuts and strong Chinese reserve buying.
In the precious metals market, spot silver fell slightly to $31.28 per ounce, platinum rose to $1,008.85, and palladium dipped to $924.00. Overall, gold prices are expected to maintain a bullish bias in the coming weeks as investors closely monitor economic indicators and central bank policies.
