Gold heading lower for the second week ahead of US jobs data

Gold prices are heading to decline for the second week in a row, despite the stability of prices on Friday, as investors await non-farm payrolls data in the United States, which may provide indications of the position that the Federal Reserve (the US central bank) will adopt regarding monetary policy.

Gold settled in spot transactions at $2,301.49 per ounce by 0215 GMT, and fell by more than one percent this week. Prices have fallen $130 since hitting an unprecedented high of $2,431.29 earlier in April.

US gold futures increased 0.1 percent to $2,311.20.

Christopher Wong, currency strategist at OCBC, said: “The significant decline over the past two weeks was due to decreased concerns about geopolitical risks…”

Egyptian-led efforts to revive faltering negotiations between Israel and the Palestinian Islamic Resistance Movement (Hamas) have raised hopes about the possibility of reaching a ceasefire agreement in Gaza.

The US Federal Reserve indicated on Wednesday that it is still inclined to eventually reduce borrowing costs, but indicated that recent disappointing inflation readings may put interest cuts out of the way for some time.

It is known that precious metals are usually used to hedge against inflation, but high interest rates reduce the attractiveness of gold, which does not generate returns.

The non-farm payrolls report is scheduled for release at 1230 GMT.

As for other precious metals, silver fell in spot transactions by 0.2 percent to 26.65 US dollars and fell by approximately two percent during the week.

Platinum rose 0.9 percent to $957.15 and is on track to record a weekly increase, while palladium rose 0.1 percent to $935.99.