Gold set for fourth weekly rise as US data lifts rate-cut hopes

Gold prices rose on Friday (Sep 12) and were headed for a fourth consecutive weekly gain, as fears of a weakening US labour market eclipsed inflation concerns ahead of an expected US Federal Reserve rate cut next week.

Spot gold rose 0.1 per cent to US$3,637.06 per ounce as at 8.59 am. Bullion gained 1.4 per cent so far this week.

US gold futures for December delivery was steady at US$3,674.20.

US consumer prices rose 0.4 per cent in August, the steepest monthly rise in seven months, driven by higher housing and food costs, while data on Wednesday showed an unexpected decline in US producer prices in August.

Weekly jobless claims surged last week, underscoring a material softening in labour market conditions after the US government said that nonfarm payrolls may have been overstated by 911,000 jobs in the 12 months through March.

This followed on Friday’s employment report, which showed job growth nearly stalled in August.

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The Fed is expected to lower its key interest rate by 25 basis points on Sep 17 as labour market softness overshadows inflation risks, said almost all 107 economists in a Reuters poll, with most expecting another cut next quarter.

US 10-year Treasury yields hovered near four-month lows, while the US dollar index was headed for a weekly decline.

Greenback-priced bullion, which hit a record high of US$3,673.95 on Tuesday, is often considered a hedge against inflation and uncertainties and tends to perform well in a low-interest-rate environment.

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Meanwhile, US President Donald Trump’s administration on Thursday asked a federal appeals court to allow Trump to remove Fed governor Lisa Cook from office for now after a judge said that he likely lacked cause to do so.

Elsewhere, spot silver fell 0.2 per cent to US$41.48 per ounce, platinum steadied at US$1,378.40 and palladium held ground at US$1,188.34. All three metals were set for a weekly rise. REUTERS