Gold ticks up on virus fears as investors await U.S. jobs data

Economists expect U.S. nonfarm payrolls to have grown by 706,000 jobs in June, with the unemployment rate falling from 5.8% to 5.6%, according to a Dow Jones survey.

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London: Gold prices inched up on Friday, on concerns over the spread of delta variant of the novel coronavirus, while investors awaited U.S. non-farm payrolls data that could influence the timeline of the Federal Reserve’s monetary policy shift.

Spot gold rose 0.1% to $1,778.26 per ounce, by 0305 GMT. It has fallen 0.1% so far this week. U.S. gold futures added 0.1% to $1,778.50.

“The spread of the delta variant is supporting gold as it can delay economic recovery… (However) the medium-term outlook remains bearish biased because we’re embracing the start of the tapering cycle,” said Margaret Yang, a strategist at DailyFX.

The highly contagious delta variant has made countries in Asia and Europe walk back on reopening plans, while White House said it would send out special teams to hot spots around the country to combat the contagion.

Investors’ focus is on U.S. non-farm payrolls data due at 1230 GMT which is likely to show an increase of 690,000 jobs last month, as per a poll.

A print of one million or more in the non-farm payrolls report can expedite Fed’s policy tapering and rate-hike plans, Yang said.

U.S. private payrolls and jobless claims data this week has shown the labor market is gathering speed as the economy fully reopens.

The dollar held near three-month highs, making gold expensive for other currency holders.

Several Fed members have said in recent weeks that the central bank could start discussing tapering in the coming months. While a “taper tantrum” poses a downside risk to gold, inflation worries will support prices in the near term, Fitch Solutions said in a note.

Silver rose 0.2% to $26.05 per ounce, while platinum gained 0.3% to $1,085.64.

Palladium was steady at $2,762.75, and was set for a second straight weekly gain.

The pan-European Stoxx 600 added 0.2% by mid-morning, with travel and leisure stocks climbing 1.2% to lead gains, while banks fell 0.7%.

The tepid trade in Europe follows a mixed session in Asia-Pacific, where mainland Chinese and Hong Kong stocks pulled back sharply while other major markets made modest gains.

Stateside, stock futures were little changed in early premarket trade as investors looked ahead to the Labor Department’s all-important monthly jobs report. Economists expect nonfarm payrolls to have grown by 706,000 jobs in June, with the unemployment rate falling from 5.8% to 5.6%, according to a Dow Jones survey.

Though the headline job creation figure is a key economic indicator, traders will likely be scrutinizing the change in average hourly earnings for any sudden uptick in wages. The average hourly wage is estimated to have jumped 0.3% on a month-over-month basis, and climbed 3.6% over the last 12 months.

Back in Europe, euro zone producer prices gathered pace in May on the back of rising energy prices, Eurostat revealed on Friday. Factory gate prices across the 19-member common currency bloc rose 1.3% month-on-month and 9.6% year-on-year.

On Thursday, following two days of talks, 130 countries pledged support for the U.S. proposal of a global minimum corporate tax of 15%.

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