Gold bars and gold coins of different sizes lie in a safe on a table at the precious metals dealer Pro Aurum.
Sven Hoppe | Picture Alliance | Getty Images
Gold prices firmed on Friday as the dollar retreated from its highs, but gold prices were still on course for a weekly decline as traders looked beyond this month’s widely-expected Federal Reserve pause and looked set to continue robust US data focused.
Spot gold was up 0.3% at $1,924.98 an ounce by 03:45 GMT but expected a weekly decline of 0.7%. US gold futures were up 0.3% to $1,949.00.
“Market participants are looking for other asset classes that can offer them higher returns. Seems like the dollar right now,” said Brian Lan of Singapore trader GoldSilver Central.
The dollar slipped 0.2% on the day but was still on course for its longest weekly winning streak in nine years, buoyed by a set of robust US economic data that also cast doubt on the end of the Fed’s rate-hiking cycle.
Data this week showed the US services sector gained momentum in August, while jobless claims unexpectedly fell to their lowest level since February last week, signaling a still-tense job market.
According to the CME FedWatch tool, markets have priced in about a 93% chance that the Fed will leave rates unchanged at its Sept. 19-20 meeting, but are betting on a 41% chance of another rate hike before 2024 .
Higher interest rates are boosting rival safe-haven Treasury yields, which are set to rise for the first time in three weeks, making non-interest-bearing gold less attractive.
Three Fed officials on Thursday hinted that the Fed might refrain from raising interest rates in September but stressed that more needs to be done to curb inflation.
Silver was up 0.6% to $23.08 an ounce and platinum was up 0.2% to $905.34. However, both weeks faced the worst weeks since June 23.
Palladium was up 0.6% to $1,218.77.
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