Gold Gains As Stocks Pull Back; US Jobs Data In Focus For Revival of Covid-hit Economy

Gold prices rose on Friday, as US Treasury yields fell and a pullback in global equities bolstered demand for the safe-haven metal ahead of the U.S. non-farm payrolls report.

Spot gold was up 0.3% at $1,935.84 per ounce by 0304 GMT, after falling to a near one-week low on Thursday. Bullion prices have declined 1.5% so far this week.

U.S. gold futures rose 0.2% to $1,941.80.

“It’s a bit of flight to safety right now we are seeing in gold because the stock markets are lower,” said Edward Meir, an analyst at ED&F Man Capital Markets. “What also could be helping gold is the sharp slide we are seeing in U.S. yields.”

Asia’s stock markets slipped, following the steepest Wall Street sell-off since June, while benchmark 10-year U.S. Treasury yields were on track for their biggest weekly decline in nearly three months.

Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.

All eyes are now on U.S. non-payroll figures due out at 1230 GMT for the latest indication of how the coronavirus-hit economy is faring.

The data is expected to show payrolls grew by 1.4 million in August, compared to the 1.763 million jobs created in the previous month.

Gold is expected to be range bound between $1,930 and $1,950 ahead of the non-farm payrolls report, said Stephen Innes, chief market strategist at financial services firm AxiCorp.

“The reason for gold not sort of firing higher right now is because the dollar is picking up steam,” he added.

Meanwhile, Chicago Fed President Charles Evans called on Congress to deliver more fiscal aid and signalled the U.S. monetary policy would be eased further and interest rates kept at ultra-low levels for years to help the economy recover its pre-pandemic strength.

Elsewhere, silver gained 0.2% to $26.67 per ounce and palladium climbed 1.2% to $2,313.04.

Platinum rose 0.3% to $891.50 but was on track for its worst week since mid-March, down over 4%.

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