October 5, 2018 / 1:28 AM / 2 months ago

PRECIOUS-Gold little changed ahead of U.S. jobs report

BENGALURU, Oct 5 (Reuters) - Gold prices held steady early Friday as investors remained cautious after U.S. Treasury yields hit multi-year peaks and ahead of monthly employment data, which if stronger could boost the Federal Reserve’s case for a tighter monetary policy.

FUNDAMENTALS

* Spot gold was flat at $1,199.20 an ounce at 0119 GMT. Spot gold was on track to gain 0.6 percent for the week, which would mark its biggest weekly gain since the week of Aug. 24.

* U.S. gold futures rose 0.1 percent to $1,202.90 an ounce.

* The U.S. Treasuries market’s two-day selloff pushed its volatility to its highest level since June as investors shed their bond holdings on surprisingly strong economic data and signals the Fed would raise interest rates further.

* Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

* The dollar index against a basket of six major currencies was little changed at 95.765, after climbing to a six-week peak of 96.121 in the previous session.

* The number of Americans filing for unemployment benefits fell to a near 49-year low last week, pointing to sustained labor market strength, which should continue to underpin economic growth.

* The Italian government on Thursday dismissed concerns that the European Commission would reject its plan to raise deficit spending next year and signalled that it would not backtrack, even under market pressure.

* China is testing global investors’ appetites with plans for a rare sovereign bond issue this month even as U.S. tariffs threaten to put more pressure on its slowing economy.

* Gold-backed exchange-traded funds (ETFs) experienced outflows in North America European and Asian funds during September, as investors continued to show extreme short positioning, the World Gold Council said on Thursday.

DATA AHEAD (GMT) 0600 Germany Industrial orders Aug 0600 Germany Producer prices Aug 0645 France Trade data Aug 1230 U.S. Nonfarm payrolls Sep 1230 U.S. Unemployment rate Sep 1230 U.S. International trade Aug (Reporting by Sumita Layek in Bengaluru; editing by Richard Pullin)

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