Gold prices held steady on Friday and were on track for their first weekly gain in three weeks. Traders are betting that the U.S. Federal Reserve will start cutting rates soon, which has sent the dollar and Treasury yields lower.
Spot gold was little changed at $2,377.13 per ounce as of 0321 GMT, with bullion gaining about 2% so far this week. U.S. gold futures rose 0.2% to $2,396.00.
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The dollar hovered close to an eight-week low, and the benchmark 10-year U.S. Treasury yield fell to as low as 4.275% on Thursday, its lowest since April 1. This environment makes bullion more attractive for investors.
Markets are now looking forward to the U.S. non-farm payrolls data at 1230 GMT. There is a possibility that jobs growth may come in below the 185,000 median forecast of economists.
A series of weaker macroeconomic data this week has added to signs that inflation is cooling. This has increased the likelihood that the Fed will start cutting rates as early as September. Lower interest rates reduce the opportunity cost of holding non-yielding bullion, making gold more attractive.
Gold prices are expected to hit another record high this year, driven by a combination of factors, including U.S. rate cut expectations, central bank buying, and geopolitical tensions. This underpinned bullion demand, pushing prices to a record high of $2,449.89 on May 20.
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In other metals, spot silver fell 0.4% to $31.16 per ounce, platinum was up 0.3% at $1,006.15, and palladium lost 0.4% to $925.75. The outlook for these metals also depends on broader economic indicators and investor sentiment.
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