Gold heads for first weekly gain in 5 weeks as Fed rate hike bets recede

COMEX gold rose 0.5% to $4,144.83 an ounce Friday, heading for its first weekly gain in five weeks after weaker-than-expected US payrolls data reduced bets on a September rate hike.

"$4,000 looks like a very good support at this moment, and I think the market will stay here for quite a while," Peter Fung, head of dealing at Wing Fung Precious Metals, said. "However, there is still a lot of uncertainty, which is why people are hesitating to buy too much at this moment."

The metal touched $3,942.10 earlier in the week before recovering, with prices falling about 8.4% in June — the first monthly drop since March. US gold futures for August delivery climbed 0.8% to $4,157.50. The US dollar headed for its largest weekly decline in nearly three months, lending additional support to bullion.

Gold at $4,144.83 remains about 5.4% below its recent high of $4,382.62. Traders are watching the $4,162-to-$4,214 retracement zone as the next resistance area, with the June nonfarm payrolls report due Thursday serving as the next signal for direction.

Physical Demand Mixed Across Asia

In India, physical gold demand eased Friday after a brief pickup earlier in the week as prices rebounded from a three-month low. Domestic prices climbed to as much as ₹148,046 per 10 grams after touching ₹140,450 on Tuesday, the lowest since March 27. Dealers quoted a premium of up to $5 an ounce and a discount of $7 over official domestic prices, compared with last week's premium of up to $6, according to Reuters.

"Jewellers were purchasing, but volatile prices made them cautious. The lean demand season has now started, as there are no major festivals soon," a Mumbai-based bullion dealer with a private bank said.

In China, bullion traded at par to discounts of $2 an ounce versus the global benchmark, narrowing from last week's $3-to-$7 discount range. In Hong Kong, gold traded between a $0.50 discount and a $1.70 premium, while Singapore saw a $1 discount to a $1.60 premium.

Silver extended its recovery, gaining 1% to $61.50 an ounce, extending a 5% surge over the previous three sessions. Platinum rose 2.4% to $1,655.15, and palladium added 0.9% to $1,278.89, with all three metals trading near their highest levels in more than a week.

The trigger for the broad precious metals rally was Thursday's weaker-than-expected US nonfarm payrolls and private payrolls data, which eased concerns over persistent inflation and the prospect of higher-for-longer interest rates. The CME FedWatch tool showed the probability of a September rate hike falling from about 64% earlier in the week.

This article is for informational purposes only and does not constitute investment advice.