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Gold set for best week in 2019 on rate cut views; eyes on U.S. jobs data

Published 2019-06-07, 02:27 a/m
© Reuters.  Gold set for best week in 2019 on rate cut views; eyes on U.S. jobs data
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* Gold up 2.1% so far this week

* Investors await U.S. jobs data due at 1230 GMT

* Platinum on track for its first weekly gain in 7

* Silver set to post best week in over 4 months

By Brijesh Patel

June 7 (Reuters) - Gold prices eased on Friday, but were headed for their best week this year supported by expectations of an interest rate cut by Federal Reserve and heightened global trade conflicts, while investors await U.S. jobs report due later in the session.

Spot gold XAU= was down 0.2% at $1,332.31 per ounce, as of 0122 GMT, while U.S. gold futures GCv1 were down 0.4% at $1,337 an ounce.

However, gold has gained 2.1% so far this week and is set to post its best weekly percentage gain since early-December.

"Optimism that the U.S.-Mexico tariffs may be short-lived is currently fuelling optimism in global markets," Howie Lee, an economist at OCBC Bank, said.

"Gold is likely to stay muted through the rest of the day before the release of the non-farm payrolls. Investors want to see the impact on the U.S. jobs market before reassessing the current pessimism."

Mexican and U.S. officials held a second day of talks on trade and migration on Thursday amid reports U.S. President Donald Trump might delay the imposition of tariffs, which rendered some support to the financial markets. MKTS/GLOB Trump said he would decide whether to carry out his threat to hit Beijing with tariffs on at least $300 billion in Chinese goods after a meeting of leaders of the world's largest economies late this month. has risen nearly $50 an ounce after Washington's threat of tariffs on Mexico, while recent weak economic readings from the United States increased hopes of an interest rate cut.

New York Federal Reserve Bank President John Williams (NYSE:WMB) on Thursday said concerns about escalating trade tariffs and slowing global growth are boosting uncertainty and holding back business investment, but he is keeping an open mind on interest rates. now await data on U.S. non-farm payrolls due at 1230 GMT for clues on the trajectory of interest rates.

"If we get a poor non-farm number, then the dollar would sell off and gold can regroup," said INTL FCStone analyst Edward Meir.

The dollar index .DXY , which is set to post its worst week since week ended March 15, was relatively unchanged against a basket of major currencies on Friday.

"There is a lot of (technical) resistance around the present levels. The $1,350 needs to be taken out and next target is $1,370, which is a more stubborn resistance," Meir said.

Among other metals, silver XAG= gained 0.2% to $14.88 per ounce, on track for its best week since Jan. 25.

Platinum XPT= eased 0.4% to $799.73, but the auto-catalyst metal was headed for its first weekly gain in seven.

Palladium XPD= edged 0.1% higher at $1,352.90 an ounce.

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