Gold prices witnessed a decline today, reaching the level of 1,800 dollars an ounce.
The decline came after pressure from the stronger dollar, as investors awaited the US jobs report.
Gold fell in immediate transactions 0.3% to $ 1,799.46 an ounce, and is heading towards recording the worst weekly performance since mid-June.
US gold futures fell 0.4% percent to $1,802.50, according to Reuters.
“If we get a combination of really solid payroll numbers coming on the back of a hawkish rhetoric by the Fed, I think it’ll spook any interest rate sensitive markets like gold,” said Stephen Innes, a managing partner at SPI Asset Management.
But he said that a complete collapse of gold is highly unlikely and that the support level at 1,790 dollars should hold.
Concerns about a gradual easing of stimulus began after Federal Reserve Vice Chairman Richard Clarida said conditions for an interest rate increase could be met in late 2022, and that the central bank could begin to scale back its asset purchase program this year.
Christopher Waller, a member of the bank’s board of governors, said he sees the potential to reduce accommodative policy sooner than some expect, given the progress of the economic recovery and the improvement of the labor market.
The rise in interest rates reduces the opportunity cost of owning the yellow metal, which does not yield a return.
The dollar index rose 0.1%, reducing the attractiveness of gold to holders of other currencies.
The US non-farm payrolls report is scheduled for Friday evening.
As for other precious metals, silver settled at $25.12 an ounce and fell by 1.4% in the week.
Platinum fell 0.4% to 1001.66 and is on track for its biggest weekly drop since June.
In a related context, the dollar index rose after the statements that tend to tighten monetary policy.
However, analysts see the increase in coronavirus cases as a support for gold prices.
As for other precious metals, silver fell 0.1% to $25.34 an ounce, after touching a three-week peak on Wednesday.
Platinum recorded its lowest level in more than seven months at $1,005.50 and fell in the latest trading by 1.5% to reach $1,010.46.
Palladium rose 0.2% to $2,652.81.
The rise in gold comes as investors await the results of indicators from the US jobs data regarding the recovery of the labor market.