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Gold set for worst week since March; focus on U.S. jobs data

06/04/2021 | 05:24am EDT

* U.S. nonfarm payrolls due at 1230 GMT

* Dollar hits three-week high

* U.S. 10-year Treasury yield rises above 1.6%

June 4 (Reuters) - Gold was set for its biggest weekly decline since March on Friday, pressured by a firm dollar and upbeat U.S. data that pointed to a strengthening labor market, raising expectations for strong nonfarm payrolls data.

Spot gold was little changed at $1,870.07 per ounce by 1118 GMT, after hitting its lowest since May 19 at $1,855.59 earlier in the session.

U.S. gold futures traded 0.1% lower at $1,871.10 per ounce.

While a stronger-than-expected U.S. jobless claims data has already raised concerns about early tapering by the Federal Reserve, much really hinges on Friday's job figures, as "gold has been building up for a correction for quite a long time now", said Ole Hansen, head of commodity strategy at Saxo Bank.

Initial claims for state unemployment benefits fell below 400,000 last week, while U.S. private employers boosted hiring in May, data showed on Thursday "Amid receding growth and inflation risks, we thus believe that the demand for gold and silver as a safe haven should fade further, leading prices lower in the medium to longer-term," Carsten Menke, analyst at Julius Baer said in a note.

The dollar index jumped to a three-week high, making gold more expensive for holders of other currencies, while the benchmark 10-year yield rose to 1.63%.

A shift to tighter policy from the Fed could cut some of gold's appeal.

There is a risk that gold's correction could turn a bit deeper on a strong jobs report, but if gold stays above $1,825, then the market could view the current correction just as a mild one within a strong uptrend, added Hansen.

Silver slipped 0.5% to $27.32 per ounce and was on track for its biggest weekly fall since late March.

Palladium fell 0.1% to $2,836.17 and platinum was down 0.8% at $1,147.53 (Reporting by Nishara Karuvalli Pathikkal and Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.02% 0.7376 Delayed Quote.-4.28%
BRITISH POUND / US DOLLAR (GBP/USD) 0.17% 1.39266 Delayed Quote.1.52%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.14% 0.7992 Delayed Quote.1.14%
DOW JONES FXCM DOLLAR INDEX 0.03% 11897.28 Delayed Quote.2.06%
EURO / US DOLLAR (EUR/USD) 0.10% 1.1855 Delayed Quote.-3.22%
GOLD 0.40% 1816.068 Delayed Quote.-5.17%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.11% 0.013438 Delayed Quote.-1.96%
JULIUS BÄR GRUPPE AG 0.90% 58.52 Delayed Quote.13.73%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.12% 0.69641 Delayed Quote.-3.02%
PALLADIUM 0.62% 2646 Delayed Quote.6.38%
SILVER 0.81% 25.209 Delayed Quote.-6.17%
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