Gold edged up on Friday but was headed for a third straight weekly drop, as data pointing at a resilient U.S. economy bolstered the likelihood of the Federal Reserve keeping interest rates higher for longer and pinned the dollar near recent peaks.
Spot gold inched up 0.1% to $1,697.80 per ounce, as of 0055 GMT but was down 2.2% for the week so far.
U.S. gold futures were flat at $1,709.10.
The dollar index was slightly off a 20-year peak scaled in the previous session and was on track for a third straight weekly rise.
The number of Americans filing new claims for unemployment benefits fell to a two-month low last week, while layoffs dropped in August.
U.S. manufacturing grew steadily last month but factory activity in China, the eurozone, and Britain fell as Russia’s war in Ukraine and China’s zero Covid-19 curbs continued to hurt businesses, surveys showed on Thursday, although there were indications cost pressures were starting to ease.
Major central banks are expected to continue with aggressive monetary policy tightening to rein in sky-high inflation but is also fanning fears of an economic slowdown.
Even though gold is seen as a hedge against inflation and economic uncertainties, higher interest rates increase the opportunity cost of holding the bullion.
Persistent weakness last month in China’s property market and manufacturing sector has renewed risks to the major gold consumer’s recovery already threatened by disruptions from widespread Covid restrictions.
Spot silver dipped 0.1% to $17.83 per ounce, platinum edged 0.2% higher to $829.87 and palladium rose 0.3% to $2,018.63. Source: CNBC