Gold headed for a third straight weekly drop as the dollar rallied ahead of key US jobs data, which could provide further clues on the size of the Federal Reserve’s next interest-rate hike.
Bullion is trading near a six-week low as a gauge of the greenback climbed to a record on Thursday and Treasury yields continued to ascend, damping the appeal of the non-interest bearing precious metal. The jobs report later Friday is expected to show healthy payrolls growth for August and follows stronger-than-expected US manufacturing data.
Fed Bank of Atlanta President Raphael Bostic said Thursday the campaign to cool inflation was still not complete, noting that the current pace was a long way from the US central bank’s 2% goal. Traders increasingly anticipate another large 75 basis points rate rise to contain price pressures at the next policy decision meeting September 20-21.
“Gold is becoming a punching bag as surging Treasury yields have rejuvenated the king dollar trade,” said Edward Moya, a senior market analyst at Oanda Corp. There’s “no reprieve in sight for gold until the move higher with global bond yields is over,” he added.
Spot gold rose 0.1% to $1 699.57 an ounce as of 5:29 a.m. in London, and is down 2.2% this week. Prices fell to the lowest level since July 21 on Thursday. The Bloomberg Dollar Spot Index slipped 0.1%. Silver, palladium and platinum advanced.
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