(Bloomberg) — Gold is headed for a straight weekly gain on expectations the Federal Reserve will cut interest rates before year-end, with traders awaiting U.S. jobs data for the next round of outlook clues.
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Gold bullion for immediate delivery was trading at more than $2,363 an ounce after rising more than 1% this week. Silver also benefited from the rally, climbing back toward $31 an ounce.
Data released Wednesday showed the U.S. services sector contracted at its fastest pace in four years, while the labor market showed further signs of slowing. If inflation continues to fall, the slowdown could allow the Fed to cut borrowing costs, which would be beneficial for gold, which does not pay interest.
Gold’s rally this week extends a run of three quarterly gains, with prices hitting a record high in May. The rally has been fueled by massive central bank purchases and geopolitical tensions. Buying in Asia has also helped, as local currencies have fallen as investors seek assets that preserve their value.
Spot gold was up 0.3% at $2,363.67 an ounce by 1:30 p.m. in Singapore, with the Bloomberg Dollar Spot Index and 10-year U.S. Treasury yields both on track for weekly declines. Silver has risen nearly 5% this week, while platinum and palladium have also gained ground.
The U.S. jobs report is expected to show a decline in hiring and a moderation in wage growth. Wages likely rose by 190,000 last month, according to the median estimate in a Bloomberg survey. Unemployment is expected to hold at 4%, its highest level in more than two years.
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