Gold Inches Higher Before Jobs Data That May Influence Fed Rates

(Bloomberg) — Gold edged higher, ahead of a key US jobs report that may influence the Federal Reserve’s policy on interest rates.

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US nonfarm payrolls due later Friday are the next major data release before policymakers meet on Dec. 17-18 in Washington. While swaps markets are pricing in a 25 basis-point cut, strong labor figures may deter the central bank from implementing aggressive monetary easing next year. Lower rates are positive for non-interest bearing gold.

A skip in cuts will be bearish for gold in the near term, ANZ Group Holdings Ltd. analysts, including Mahjabeen Zaman and Brian Martin, said. “Surprisingly strong nonfarm payroll data could drag prices below $2,600 an ounce,” they said in a note.

The precious metal hovered around $2,639 an ounce in early European trading, after slipping 0.7% Thursday, its biggest drop since Nov. 25. It has been trading in a narrow range since early last week.

Prices of bullion have slipped from a record high in late October, as the dollar rallied following the election victory of Donald Trump and tensions eased in the Middle East. Still, they remain up by more than a quarter this year, supported by US rate cuts and central-bank buying.

Gold has scope to push higher next year, likely hitting a record, on the Fed’s move to cut rates and further buying by central banks, according to Macquarie Group Ltd. Prices are set to average $2,650 an ounce in the first quarter of 2025, it said.

Spot gold was 0.3% higher at $2,639.10 an ounce as of 7:55 a.m. in London, on track for a small weekly decline. Silver and platinum were little changed, while palladium rose 0.9%.

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