- Israel strikes Hezbollah-controlled suburbs of Beirut
- US dollar set for its strongest weekly rise in over a year
- Silver, platinum, palladium head for weekly losses
March 6 (Reuters) - Gold rose on Friday after softer U.S. payrolls data kept hopes of a Federal Reserve rate cut alive, but remained on track for its first weekly decline in five weeks as a stronger dollar kept gains in check.
Spot gold was up 1.3% at $5,144.69 per ounce as of 10:50 a.m. ET (1550 GMT), but was down 2.7% so far this week. U.S. gold futures for April delivery rose 1.5% at $5,155.
"An alarmingly weak payrolls report that saw heavy private sector job losses along with higher wages whispers stagflation; let's see if this is enough to help gold recover from what has been a disappointing week," said Tai Wong, an independent metals trader.
Data showed that nonfarm payrolls decreased by 92,000 jobs last month, compared with economists’ expectations for a 59,000 gain, while the unemployment rate rose to 4.4%.
On the geopolitical front, Israel pounded Beirut after ordering an unprecedented evacuation of the entire southern suburbs of the Lebanese capital, a major expansion of the war against Iran it began a week ago alongside the United States.
The U.S. dollar index was set for its strongest weekly rise in over a year as the escalating conflict in the Middle East drove demand for safe-haven assets.
That has made dollar-priced gold costlier for overseas buyers, helping push the metal down despite its reputation as a haven from risk.
"You have algorithmic sellers calibrated to automatically sell when the dollar strengthens, part of the underperformance in precious metals this week," said Hugo Pascal, a precious metals trader at InProved.
Fed policymakers will meet on March 18, where they are widely expected to hold rates steady, with the first cut widely expected in July, as per the CME FedWatch tool.
Gold is often viewed as a long-term inflation hedge, but typically performs well in low interest-rate environments because it yields no income. It is up more than 18% so far this year.
As the Iran conflict raged, crude prices were headed for their sharpest weekly gain since Russia’s invasion of Ukraine in February 2022, stoking renewed inflation fears.
Spot silver rose 2.5% to $84.71 per ounce. Spot platinum was steady at $2,122.44, while palladium edged down 0.3% to $1,625.25. All metals were headed for weekly losses.
Reporting by Anmol Choubey in Bengaluru; Editing by Jan Harvey
Source: Reuters