Gold Set for Weekly Gains on U.S. Policy Uncertainty
Gold is headed for a weekly gain of roughly 2% as uncertainty around future U.S. policy under President-elect Donald Trump boosts safe-haven demand.
In early trade, futures are up 0.6% to $2,706.70 a troy ounce, with traders awaiting a key U.S. jobs report later on Friday for more cues on the path of interest rates. According to Swissquote bank, activity on Fed funds futures suggests the next cut would be in May. But "a set of stronger-than-expected [jobs] data could flip this expectation to the 'no cut until June' side very rapidly, enhance the selloff in the U.S. treasuries and support a further appreciation of the U.S. dollar," senior analyst Ipek Ozkardeskaya says in a note to clients.
The yellow metal is seen as a hedge against inflation, but higher interest rates reduce the appeal of holding the non-yielding asset.
Source: Marketwatch