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Last Updated : Aug 07, 2015 06:30 PM IST | Source: Reuters

Gold edges up, faces longest weekly losing run since 1999

A strong jobs number would fan speculation the US central bank will raise rates next month. Higher interest rates would put non-yield-bearing gold under further pressure, increasing the opportunity cost of holding the metal.


Gold rose on Friday as the dollar softened, but was on track for a seventh straight weekly fall, the longest since 1999, as the market braced for US non-farm payrolls data that could help determine the timing of a Federal Reserve rate hike.



A strong jobs number would fan speculation the US central bank will raise rates next month. Higher interest rates would put non-yield-bearing gold under further pressure, increasing the opportunity cost of holding the metal.



"It certainly remains a challenging environment for gold prices to maintain any upward momentum," Standard Chartered analyst Nicholas Snowdon said.

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"It comes back to that very simple argument that the market is waiting for the Fed to hike and the payrolls number today for whether September really is in play."



Spot gold was up 0.3 percent at USD 1,091.86 an ounce at 0914 GMT. The metal fell as low as USD 1,077 on July 24, its weakest since February 2010.



Prices were down 0.2 percent on the week, with a seventh weekly loss in a row matching a similar losing streak in May-June 1999.



US gold for December delivery gained 0.2 percent to USD 1,092.30 an ounce.



The dollar edged lower against a basket of leading currencies, while European shares fell after disappointing german industrial output data.



Gold's marking time ahead of the US employment report "may be the calm before the storm, with probability calling for another leg lower to the 2010 low of USD 1,044", according to technical analysts at ScotiaMocatta.



Economists polled by Reuters forecast the US economy added 223,000 jobs in July, the same outcome as June. US job growth has exceeded 200,000 in 14 of the last 16 months.



A slew of upbeat US economic data, including Thursday's positive weekly jobless claims, shows "there's not really much to stop the Fed from increasing rates", said Ric Spooner, chief market analyst at CMC Markets in Sydney.



"There's not a lot of natural reasons for investors to buy gold at the moment. The dollar is getting stronger and there's no real sign of inflation on the horizon with weaker oil prices and other commodities."



Gold buyers in Asia were in no hurry, anticipating the market to weaken further, with premiums in India and Hong Kong picking up only modestly this week.


Spot platinum was unchanged at USD 951 an ounce, heading for a fifth weekly fall in a row, while palladium rose 0.6 percent to USD 600 and silver gained 1.3 percent to USD 14.76 an ounce.



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First Published on Aug 7, 2015 06:30 pm
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