Gold retreated from a two-week high on Friday, but the U.S. non-farm
payrolls report may trigger more safety demand on the yellow metal, given the
undergoing uncertainties surrounding global economies.
The precious metal traded lower at $1437.20 an ounce, sliding from a top
at $1449.10, the highest level since July 19.
Gold prices soared sharply on Thursday after U.S. President Donald Trump
threatened to slap a 10 percent tariff on the $300 billion worth of remaining
Chinese goods, thereby reigniting the trade war between the U.S. and
China.
With other mounting uncertainties surrounding the global economy, most
notably the world economy slowdown and Brexit, gold may gain further haven
demand.
China’s Shanghai Composite Index led losses among Asian shares on Friday
as it slipped 1.4 percent to 2,867.84, trailing overnight losses on Wall Street.
Later in the day, eyes will focus on the U.S. non-farm payrolls report
for the month of July as it will reflect the health of the labor market in the
U.S. after the Fed’s rate cut decision on Wednesday.
After a robust job creation pace in June of 264,000, the world’s biggest
economy probably created 164,000 jobs in July, according to median forecasts for the
NFP.
A lower than forecast reading would support the Fed’s decision and signal
the move was needed to support the economy and may followed by other monetary easing
measures.
As known, gold mainly takes advantage of lower interest rates,
especially in the United States, since it provides no interest to bullion
holders.
The U.S. dollar index fell for a second straight session to 98, resuming
its plunge from a more than two-year high hit the previous session.
Gold could continue its rally after generating gains over the previous
three months, where it succeeded to build strong support at $1400 an ounce.