Investing.com — Gold prices moved slightly in Asian trade on Friday, as markets remained hesitant towards the yellow metal ahead of the release of key US jobs data, while the possibility of higher interest rates for a longer period puts gold on track for weekly losses.
The yellow metal has seen a sharp decline from record levels over the past two weeks, as safe-haven demand dried up and pressures from US interest rates came back into play.
It settled at $2,302.72 an ounce, while the price of contracts expiring in June rose slightly to $2,311.45 an ounce by 00:21 ET (04:21 GMT).
The yellow metal witnessed some rise in prices as the dollar fell during overnight trading. But this has only limited the recent losses in gold.
Gold fell about 1% this week, with non-farm payrolls data awaited
Spot prices fell about 1% this week, the second straight week in the red. The losses in bullion came as price expectations declined due to the possibility of US interest rates remaining high for a longer period.
Data scheduled for release later on Friday are expected to impact interest rate expectations. Any continued signs of strength in the labor market gives the Fed more room to keep interest rates high for longer.
The central bank recently warned that this is likely to remain the same in the near term, as flat inflation gives the Fed little reason to cut interest rates. But the Fed has also indicated that it does not intend to raise interest rates further.
However, the possibility of higher interest rates in the long term does not bode well for gold, since it increases the opportunity cost of investing in the yellow metal. As geopolitical tensions in the Middle East ease, safe-haven demand for gold has dried up, leaving the yellow metal vulnerable to interest rate fluctuations.
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Other precious metals were somewhat mixed this week. It rose slightly on Friday and is set for a second week in the red. But it is expected to rise about 6% this week as it rebounds from three-week lows.
Copper prices are heading towards weekly losses after a 5-week rise
Among industrial metals, copper prices remained steady on Friday, heading toward moderate weekly losses as concerns over US interest rates sparked some profit-taking. But prices remained within sight of the highest levels of the last two years.
On the London Metal Exchange, it rose 0.2% to $9827.0 per ton, while it fell slightly to $4.5012 per pound.
The two contracts are expected to lose between 1% and 1.5% this week after rising for five consecutive weeks, amid expectations of shrinking supplies.
