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·         Gold prices on Friday hovered near a 2-1/2-month high and were on track for their best week in five months, aided by a weaker dollar and a pullback in Treasury yields as investors cautiously await U.S. non-farm payrolls report due later in the day.

 

·         Spot gold was steady at $1,815.88 per ounce by 0246 GMT, after hitting its highest since Feb. 16 at $1,817.90 in the previous session.

 

·         Bullion up more than 2.5% so far this week.

 

·         U.S. gold futures were little changed at $1,816.40.

 

·         “The weaker dollar and U.S. Treasury yields dropping below 1.6% has helped gold prices to go above $1,800,” Brian Lan, managing director at dealer GoldSilver Central said.

 

·         “The U.S. jobs data is very important point … if data comes out really good, we can see people being more positive on the economy and it might lead to Federal Reserve increasing the interest rates earlier than expected, which will impact gold.”

 

·         Market participants await U.S. monthly jobs report due at 08:30 a.m. EST to gauge the Fed’s strategy on monetary support going forward. Economists expect 978,000 new U.S. jobs for April, according to a Reuters poll.

 

·         The economic outlook is brightening, but more improvements are needed before the Fed will start to scale back monetary support, Cleveland Fed Bank President Loretta Mester said.

 

·         Dollar under pressure as U.S. payrolls data could spur more risk-taking

 

·         XAU/USD eyes $1840, overbought conditions, NFP could play spoilsports

 

Gold (XAU/USD) put up a solid show and outperformed on Thursday, rising over 1% to hit the highest levels in three months at $1818. The price of gold finally raced past the $1800 psychological level, thanks to the persistent weakness in the US dollar and the Treasury yields on dovish Fed expectations. Despite rising inflation expectations, the Fed is likely to remain committed to its accommodative policy stance until a ‘substantial progress’ is witnessed in the labor market. The recent Fedspeak also pushed back tapering bets, lifting stocks and gold at the dollar’s expense. Gold bulls ignored upbeat US Initial Jobless and signs of strengthening economic recovery, as prospects of higher inflation continue to underpin the inflation-hedge, gold.

 

The price of gold is extending the recent upsurge, sitting at a new 11-month top at $1822, as the bulls take a breather, in anticipation of the all-important US NFP report. The US economy is seen adding 978K jobs in April vs. 916K reported previously. A big NFP blowout is needed to revive the Fed’s tapering talks, which could likely trigger a sharp correction in gold. However, disappointing figures would back the central bank’s dovish approach, fuelling further upside in gold. In the meantime, the broader market sentiment and the greenback’s price action will be closely followed.