Gold lower, heads for 1% weekly loss, ahead of jobs report

Gold futures slipped Friday and headed for a weekly loss of roughly 1% ahead of a monthly U.S. jobs report that most observers expect to support the Federal Reserves path toward higher interest rates.

Economists expect that 188,000 jobs were added in April. The unemployment rate is expected to fall to 4%, after sticking at 4.1% for six months despite a steady pace of hiring. The report also includes the closely watched reading on average hourly earnings, a key feature in the inflation dialogue, with expectations for a monthly rise of 0.2%.

Read: Unemployment close to breaking below 4% barrier: What to watch in April jobs report

If the labor market report proves positive and the U.S. dollar appreciates in response, gold is likely to come under pressure again, said Carsten Fritsch, commodities analyst at Commerzbank. In this case, we would not rule out a test of the $1,300 mark.

Ahead of the release, June gold
GCM8, -0.12%
slipped $2.90, or 0.2%, to $1,309.90 an ounce. Gold has dropped in four of the past five sessions. Midweek, it wrapped trading at $1,305.60 the lowest since March 1.

The Fed will have a another opportunity to direct market interest-rate expectations in the same week that an official post-meeting statement revealed members expect an inflation uptick closer to the Feds 2% target. Several Federal Reserve officials are scheduled to speak on Friday. New York Fed President William Dudley kicks off the speeches at 12:45 p.m. Eastern, covering financial tumult of our times and challenges ahead.

San Francisco Fed President John Williams is set to appear at a monetary policy conference at the Stanford Universitys Hoover Institution at 3 p.m. Eastern. At the same conference, Fed Vice Chair for Supervision Randal Quarles steps up at 5:30 p.m. Eastern to talk about liquidity regulation and the Feds balance sheet. Dallas Fed President Rob Kaplan, Atlanta Fed President Raphael Bostic and Kansas City Fed President Esther George also participate in an evening panel.

Trade issues also remain in focus as U.S. and Chinese officials were meeting for discussions on tariffs and other issues. Worries about trade hostilities between the top two global economies have roiled financial markets in recent months, underpinning some demand for haven gold. The U.S. has handed China a lengthy list of demands, the Wall Street Journal reported, including a demand to reduce the bilateral trade deficit by at least $200 billion by the end of 2020. The deficit stood at $375 billion last year.

Read: Billionaire girds for stock-market crash by investing half his net worth in gold

Gold slipped as the ICE U.S. Dollar Index
DXY, +0.10%
which measures the buck against a basket of six currencies, rose 0.2% at 92.59. The index this week grazed its highest level since late December. The 10-year Treasury note yield
TMUBMUSD10Y, -0.34%
slipped to 2.939%. The closely watched yield has struggled to hold above the 3% line it hit late last month. Higher Treasury yields can spell weakness for gold, which, like other commodities, offers no yield.

U.S. stock futures dipped. For the week, the Dow industrials were set for a 1.6% slide as of Thursdays close, while the S&P 500 was looking at a 1.5% fall and the Nasdaq at a 0.4% decline.

Read First-quarter global gold demand drops to lowest in a decade: report

In other metals trading, July silver
SIN8, -0.04%
fell 3 cents, or 0.2%, to $16.42 an ounce. It headed for a roughly 0.5% weekly drop.

July copper
HGN8, -0.10%
settled at $3.0785 a pound, down 0.1%. July platinum
PLN8, -0.27%
fell 0.4% to $900.70 an ounce, but June palladium
PAM8, -0.09%
was little changed near $959.00 an ounce.

In ETF action, the SPDR Gold Shares
GLD, +0.51%
traded near steady and the iShares Silver Trust
SLV, +0.26%
gained 0.1%, while the VanEck Vectors Gold Miners
GDX, +1.21%
traded 0.5% higher.

Related Topics Metals and Minerals Metal Exchange U.S. Stocks Markets Gold Silver Copper

Quote References GCM8 -1.60 -0.12% DXY +0.09 +0.10% TMUBMUSD10Y -0.01 -0.34% SIN8 -0.01 -0.04% HGN8 +0.00 -0.10% PLN8 -2.40 -0.27% PAM8 -0.85 -0.09% GLD +0.63 +0.51% SLV +0.04 +0.26% GDX +0.27 +1.21% Show all references
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Rachel Koning Beals is a MarketWatch news editor in Chicago.

Rachel Koning Beals

Rachel Koning Beals is a MarketWatch news editor in Chicago.

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