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Metals Stocks: Gold futures inch higher, nursing modest weekly gain ahead of jobs report

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Gold futures traded slightly higher Friday morning, as investors awaited September employment data from the Labor Department, which could influence trading in precious metals.

Economists polled by The Wall Street Journal expect the U.S. added 500,000 new jobs in September when data is released at 8:30 a.m. Eastern Time.

A good jobs report may compel the Federal Reserve to announce plans to scale back its bond purchases at its next meeting in November which could influence the U.S. dollar and dollar-priced assets.

“Overall, the above indicators point to strength in employment, and so we could see a positive response in the dollar this time around,” wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a research note.  

“However, if the data comes in well below expectations, then yields could drop as investors push out their rate hike expectations. In this potential event, gold on the long side might be the trade to concentrate on,” the analyst wrote.

At last check Friday morning, gold for December delivery
GCZ21,
+0.32%

GC00,
+0.32%

was trading $3.10, or 0.2%, higher at $1,762.30 an ounce, following an 0.1% gain on Thursday, with the precious metal headed for a weekly advance of 0.2%, FactSet data show.

Meanwhile, silver for December delivery
SIZ21,
-0.15%

 
SI00,
-0.15%

shed 3 cents, or 0.5%, to trade at $22.56 an ounce, following a 0.6% gain on Thursday. For the week, gold’s sister metal is headed for a 0.1% rise.

Gold and silver’s advance, even though relatively meager, this week have come against the backdrop of U.S. Treasury yields rising to their highs not seen in months, while the dollar also has been stronger.

A stronger dollar and rising yields ordinarily undercut buying in bullion because strength in the currency can make the asset comparatively more expense to overseas buyers and government debt competes with precious metals, which don’t offer a coupon, for safe-haven bids.

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