Gold jumps 1% as dollar rally stalls; focus on U.S. jobs data

NEW YORK (Nov 4) Gold prices jumped more than 1% on Friday and were headed for a weekly gain, as the dollar eased, while investors looked forward to U.S. jobs report later in the day that could shed more light on Federal Reserve's rate-hike path.

Spot gold XAU= rose 1.2% to $1,648.77 per ounce by 0906 GMT, and was up 0.4% for the week so far.

U.S. gold futures GCv1 gained 1.3% to $1,651.40.

The dollar index =USD fell 0.3%, making gold more appealing for other currency holders. USD/

"Investors are still digesting Fed's comments and today there is some more optimism, markets are trying to focus the attention also on dovish remarks, while uncertainty is still dominant," said Carlo Alberto De Casa, external analyst for Kinesis Money. MKTS/GLOB

The U.S. central bank raised interest rates by 75 basis point for the fourth time in a row this week, but also signalled it may be nearing an inflection point in what has become the fastest tightening of monetary policy in 40 years.

Data on Thursday showed number of Americans filing new claims for unemployment benefits unexpectedly fell last week. All eyes are now on U.S. non-farm payrolls data for October due at 1230 GMT.

A Reuters survey showed nonfarm payrolls likely increased by 200,000 jobs last month after rising 263,000 in September.

"Any figure above expectations could push investors to bet on further rate hikes (pressuring gold and shares), while numbers be below forecasts – in this strange scenario - can be positive for gold and stocks," De Casa added.

Gold is considered an inflation hedge, but high interest rates dent the non-yielding asset's appeal.

"Interest rates are likely to stay elevated, but slowing pace of hikes could see the pace of decline in gold prices moderate," said Christopher Wong, OCBC FX strategist.

Spot silver XAG= rose 1.9% to $19.83 per ounce, platinum XPT= climbed 1.4% to $931.94, and palladium XPD= advanced 1.8% to $1,834.40.

Reuters