Gold prices were stuck in a tight range on Friday as investors braced for a U.S. jobs report, which could influence the Federal Reserve’s rate hike trajectory.
However, bullion was still on track for its best week since March, helped by a retreat in the dollar and U.S. Treasury yields.
Spot gold was down 0.2% at $1,707.80 per ounce, as of 1147 GMT. Prices have risen about 2.9% so far this week.
U.S. gold futures slipped 0.3% to $1,715.80.
“We have non-farm payrolls in the U.S. and this will be a very important moment because as of recently somehow market expectations have shifted towards softening of the Fed’s tightening drive for monetary policies,” said Ricardo Evangelista, senior analyst at ActivTrades.
The payrolls report is due at 1230 GMT, with economists forecasting 250,000 jobs to have been added last month.
Fed officials have stuck to their hawkish stance in fight against high inflation and a better-than-expected jobs data will provide ammunition for another hefty rate hike at the central bank’s upcoming meeting, analysts said.
While gold is considered a hedge against inflation, higher U.S. rates reduce the non-yielding bullion’s appeal and boost the dollar.
“The main headwind is our expectation that the Fed will keep raising rates for longer than the market predicts, this will keep the U.S. dollar elevated and gold/other asset classes treading water or falling in value,” said Michael Langford, director at corporate advisory firm AirGuide.
“Our trading view in the short term is for the gold prices to soften below $1,700 per ounce.”
Silver eased 0.2% to $20.61 per ounce, but was on track for its biggest weekly rise since July, up more than 8% so far.
Platinum gained 0.5% to $926.70 per ounce and was headed for its best week since February 2021. Palladium rose 0.7% to $2,276.46. (Reporting by Brijesh Patel and Eileen Soreng in Bengaluru; editing by Uttaresh.V and Jason Neely)