Gold prices creep higher ahead of nonfarm payrolls, copper rises

Gold prices rose slightly on Friday as traders hunkered down before key labor data that is expected to factor into U.S. monetary policy, while copper caught some bids ahead of more cues on Chinese stimulus measures.

The yellow metal slid from key levels this week as concerns over a hawkish Federal Reserve boosted the dollar. Signs of resilience in the U.S. economy drove up bets that the Fed will have enough economic headroom to keep raising interest rates.

Spot gold rose 0.1% to $1,936.05 an ounce, while gold futures expiring in December rose 0.1% to $1,971.45 an ounce by 20:54 ET (00:54 GMT). Spot prices were down 1.2% for the week, while futures fell 2% from the key $2,000 level.

Nonfarm payrolls in focus
Markets were now focused squarely on nonfarm payrolls data due later in the day, which is expected to show that the U.S. labor market remained steady through July.

Any signs of resilience in the labor market give the Fed more impetus to hike interest rates further, given that the bank is targeting some cooling in labor conditions as part of its crusade against inflation.

Private payrolls data released earlier this week blew past expectations, ramping up concerns over a similar reading from official data.

While inflation has eased substantially this year, the labor market has remained relatively hot, keeping a floor under price pressures. But June’s nonfarm payrolls reading had fallen substantially below expectations, pushing up hopes that the Fed has limited room to keep raising rates.

A similar trend for July could ramp up expectations that the Fed is done with its rate hike cycle, potentially denting the dollar and boosting non-yielding assets such as gold.

Other precious metals also gained on Friday, with platinum up 0.3%, while silver added 0.1%.

Copper gains ahead of China stimulus signals
Among industrial metals, copper prices edged higher on Friday, recouping a bulk of the week’s losses as traders awaited more signals on major importer China.

Copper futures rose 0.3% to $3.9072 a pound, and were trading down 0.5% for the week, having recovered substantially from inter-week lows.

Chinese officials are expected to outline more stimulus measures later in the day, particularly measures aimed at shoring up domestic spending, as well as the property market.

The world’s largest copper importer is struggling to support a post-COVID economic recovery this year, after growth slowed substantially in the second quarter. Recent data also showed that the economy saw a muted start to the third quarter.