Investing.com - Gold prices rose in Asian afternoon trading on Friday, with futures rising above $2,400 as markets bet on a rate cut by the Federal Reserve ahead of non-farm payrolls data later in the day.
Gold prices rose this week as a slew of U.S. economic data raised expectations that the Federal Reserve will start cutting rates in September and the dollar fell to a two-month low.
Rate cuts by the Bank of Canada and the European Central Bank also boosted optimism about loose monetary policy, which is good for metals markets.
As of 14:01 Beijing time (02:01 a.m. Eastern Time), Investing.com commodity quotes showed that spot gold prices were basically flat at $2,375.81 per ounce; gold futures rose $3.1, or about 0.13%, to $2,394.00 per ounce, and earlier rose to $2,406.60, a new high since May 22.
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Gold prices have risen 2.6% so far this week, and the market will focus on non-farm payrolls
This week, gold prices rose as weak employment data strengthened market expectations for rate cuts, and spot gold rose by about 2.6% this cycle.
However, investors still need to pay attention to the official US non-farm payrolls report to be released later, which is expected to provide clearer guidance on the job market and interest rates.
The market expects non-farm payrolls to increase by 185,000, significantly lower than the 315,000 new jobs in March.
In addition, the Federal Reserve will hold a meeting next week, and the market generally expects to keep interest rates unchanged. However, any signal about monetary policy will be closely watched, especially against the backdrop of cooling US economic data.
CICC: Don't underestimate the timing and magnitude of the Fed's rate cuts, and be optimistic about gold
CICC reminds not to underestimate the timing and magnitude of the Fed's rate cuts. Analysts pointed out that,
"U.S. growth may still be in a downward channel and has not begun to recover. The reasons are as follows: the U.S. bond interest rate level is too high, suppressing economic growth. The marginal fiscal support for the economy has weakened, and the excess savings of U.S. residents have been exhausted..."
Therefore, they are optimistic about gold and U.S. bonds. "Based on historical cycle experience, U.S. bonds and gold have outperformed in the six months after the Fed began to cut interest rates."
In addition, "Once the overseas central bank's interest rate cuts start, the U.S. bond interest rate will decline, and the financial attributes of gold may turn to support the rise of gold. The linkage between financial attributes and monetary attributes may push gold to a record high."
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Comparing the valuations of U.S. gold stocks, analysts are most optimistic about Barrick Gold:
