07-07-2023 09:09 AM | Source: Reuters
Gold heads for fourth weekly loss on calls for more rate hikes
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Gold prices on Friday were on track for a fourth consecutive weekly loss as recent U.S. jobs data and hawkish comments from Federal Reserve policymakers strengthened bets for higher-for-longer interest rates, weighing on non-yielding bullion.

Spot gold was flat at $1,910.20 per ounce by 0240 GMT, but down 0.5% for the week. U.S. gold futures were little changed at $1,916.00.

U.S. private payrolls figures indicate strength in the labour market despite growing risks of a recession from higher interest rates, with investors now bracing for the June non-farm payrolls (NFP) data for further cues on the Fed's policy trajectory.

"A resilient and tight U.S. jobs market effectively strengthens the case for the Fed to keep pushing the benchmark interest rate higher. Right now, it's all about interest rates and a guessing game about where the terminal rate setting will land," said Tim Waterer, chief market analyst at KCM Trade.

"With U.S. yields at these high levels, gold is facing a struggle to try and stay above the $1,900 level in the short term," Waterer added. [USD/] [US/]

Meanwhile, Fed Bank of Dallas President Lorie Logan said there was a case for a rate rise at the June policy meeting, in comments that affirmed her view that more rate increases will be needed to cool off a still-strong economy.

Rate hikes increase the opportunity cost of holding non-yielding bullion.

Market participants also kept a close watch on U.S. Treasury Secretary Janet Yellen's Beijing visit amid renewed tensions.

"Any possible ratcheting up of trade tensions between the world's two biggest economies has the potential to sour market sentiment... (and) could see gold receive some safe-haven buying demand," Waterer said.

Elsewhere, spot silver fell 0.4% to $22.6567 per ounce, and platinum shed 0.3% to $898.83.

Palladium lost 0.3% to $1,238.36, but headed for a 1% weekly gain.