Gold prices fall ahead of US jobs report, but weekly gains near 5%

Gold prices edged lower on Friday ahead of the release of a key US employment report, but remained on track for their strongest weekly performance in more than two months, with gains of around 5 per cent.

Spot gold fell 0.3 per cent to $4,076.91 per ounce at 3:28 pm Bangladesh time on Friday, November 6. US gold futures for December delivery also declined 0.6 per cent to $4,088 per ounce.

Oil price fluctuations have kept inflation concerns alive. However, Brent crude was heading for a significant weekly decline amid expectations that tensions between the United States and Iran could ease following the US midterm election results. On Friday, Brent crude prices climbed back to $100 per barrel.

Persistent concerns over supplies from the Middle East also continued to support oil prices.

UBS analyst Giovanni Staunovo said there was currently a "very strong relationship" between oil prices, inflation and gold prices.

Higher energy prices could require tighter monetary policies to control inflation, increasing the opportunity cost of holding non-yielding assets such as gold.

Investors are awaiting the US non-farm payrolls report for clues about the Federal Reserve's future interest rate policy. The report is scheduled for release at 1:30 pm GMT.

Staunovo said gold could receive support if the employment figures meet expectations or come in weaker than expected, as a weakening labour market could reduce the likelihood of interest rate hikes.

On Thursday, two Federal Reserve officials supported small and gradual interest rate increases to bring inflation under control, as it remains above the central bank's target.

According to CME's FedWatch tool, market participants currently see a 64 per cent probability of a Federal Reserve rate hike in December.

Meanwhile, Goldman Sachs lowered its gold price forecast for the end of 2026 on Thursday, citing the impact of the Federal Reserve's recent hawkish policies. The investment bank cut its forecast to $4,150 per ounce from $4,650.

Lower gold prices have boosted purchases among retail buyers in India, with demand rising ahead of the major Diwali festival.

On October 30, gold prices fell to $3,869.85 per ounce, their lowest level in a year.

Among other precious metals, spot silver fell 0.6 per cent to $52.08 per ounce on Friday, while platinum declined 1 per cent to $1,531.92. Palladium remained almost unchanged at $1,029.87 per ounce.

However, all three metals were on track to record weekly gains.

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