Gold futures on Friday were rising modestly off their lowest settlement in a week on Thursday, but the precious metal is on pace for a weekly decline as investors unwound bullish bets in equities and reposition their overall portfolios amid expectations for further turbulence in financial markets.
Declines in the past 24 hours, come as stocks erased their gains for the week which may have sent traders scrambling to cover losses by selling other assets, including gold.
The next phase for market moves could be catalyzed by the U.S. Labor Department’s monthly jobs report due early Friday which is expected to show that 1.2 million Americans were added to the workforce amid the pandemic with an unemployment rate in August at 9.8% from 10.2% in the July.
If the reading disappoints it could extend a downshift in highflying equities names and force further repositioning of investor portfolios.
Chintan Karnani, chief market analyst at Insignia Consultants said that trade for bullion and silver will be contingent on how the U.S. dollar and bonds move.
“Direction of US dollar Index and US bond yields will play a greater role in dictating the price of gold and silver,” he said, which he adds could trump Friday’s nonfarm-payrolls report as investors prepare for the coming meeting of the Federal Reserve this month.
“Traders will start taking positions for September [Federal Open Market Committee meeting] on 16th September, once the NFP numbers are released. Big focus will also be on US presidential elections (for the rest of the month) once the NFP numbers are released.
were trading $6.20, or 0.3%, higher at $1,944 an ounce, after sliding almost 0.4% on Thursday to market its lowest finish for a most-active contract since Aug. 27, according to FactSet data.
For the week, gold is on pace to see a 1.6% weekly skid, according to FactSet data, while silver is on pace for a 2.4% drop over the past five trading days.