Gold eased on Friday on a stronger dollar and higher yields but was set for its best week since early May after weaker jobs data bolstered bets for the Federal Reserve to hold pat on interest rates next week.
Spot gold fell 0.3 percent to $1,961.39 per ounce. But it is headed for a 0.7 percent weekly climb, helped by a 1.5 percent jump on Thursday after a surge in US weekly jobless claims.
US gold futures settled down 0.1 percent to $1,977.20.
“Gold is oscillating in a $1,940-$1,990 range and is likely to remain so until inflation data and the Fed result next week,” said Tai Wong, a New York-based independent metals trader, adding that bullion remains “more sensitive to weak or dovish economic data.”
The dollar index bounced off two-week lows, making gold expensive for overseas buyers, while higher 10-year Treasury yields made zero-yield bullion less attractive.
Markets now priced in a 72 percent chance of the Fed standing pat next week, but odds of a hike in July were 67 percent, the showed.
Traders braced for the US inflation report for May due on Tuesday, a day before the Fed announces its policy decision.
China raised its gold reserves for a seventh straight month to 67.27 million fine troy ounces by May-end. – Reuters
