FX.co ★ Gold Set for First Weekly Rise in Five

Gold rose to $4,170 per ounce on Friday, its highest level since June 23, and was poised for a 2% weekly gain after four straight weeks of losses. The advance came as weaker-than-expected US employment data dampened expectations of an imminent interest rate hike by the Federal Reserve. US nonfarm payrolls increased by only 57,000 in June, the smallest gain in four months and well below the consensus forecast of 110,000. This prompted traders to scale back bets on a September rate increase. The CME FedWatch tool showed the implied probability of a hike sliding to 50%, down from 66% before the data release. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, boosting the metal’s appeal. At the same time, the US dollar was on track for its steepest weekly decline since April, providing additional support to gold prices. Central banks also underpinned demand, adding a net 41 metric tons to their gold reserves in May, according to the World Gold Council. In the physical market, Indian demand eased as prices climbed, whereas Chinese buying interest showed a modest improvement.