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Gold was up on Friday morning in Asia, eking out small gains as the dollar weakened. Investors now await the latest U.S. jobs report to gauge the Federal Reserve’s timeline on asset purchases and interest rate hikes.
Gold futures inched up 0.08% to $1,812.95 by 1:13 AM ET (5:13 AM GMT) but was headed towards its first weekly decline in four. The dollar, which usually moves inversely to gold, inched up on Friday but remained near a one-month low.
The jobs report, including non-farm payrolls, is due later in the day. It will be a focal point for investors as labor market recovery is one of the Fed’s requirements before it begins asset tapering and interest rate hikes.
Ahead of the report’s release, data released on Thursday showed that Americans filed 340,000 initial jobless claims during the past week. The number was lower than the 345,000 claims in forecasts prepared by Investing.com and the 354,000 claims filed during the previous week.
The dollar sank to its lowest in almost a month against major rivals on Friday, ahead of a crucial U.S. jobs report that could spur the Federal Reserve to an earlier tapering of stimulus.
The dollar index, which measures the greenback against six peers, was little changed at 92.207 after earlier touching 92.151 for the first time since Aug. 5.
The euro was also mostly flat at $1.1878, after hitting the highest since Aug. 4 at $1.1884, supported by regional inflation at a decade high and hawkish rhetoric from European Central Bank officials ahead of a policy meeting on Sept. 9.
“The market is seemingly running a progressive short USD position into today’s non-farm payrolls,” Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a client note.
The rally toward $1.19 “is not just a USD move, but a play on next week’s ECB meeting, with some talk the central bank could signal a slower pace of asset purchases,” he wrote.
Meanwhile, the U.S. central bank has made a labour market recovery a condition for paring pandemic-era asset purchases.
The number of employees put on reduced working hours in job protection schemes in Germany fell by 35% in August, the economic institute Ifo said on Friday, as recovery in Europe’s largest economy continues.
The number of people on the short-time work scheme, also known as Kurzarbeit, fell to 688,000 in August, down from 1.06 million in July, the Munich-based institute said.
“This is the first time since the start of the coronavirus crisis that the number of people on short-time work has been below one million,” Ifo survey expert Stefan Sauer said.
Ifo said nearly all sectors of the economy reported a decline in August. The hospitality industry, one of the most hit by COVID-19 lockdown, was also recovering but still had 10% of its employees on shorter hours, it added.
Earlier this week, the Labour Office said the number of people out of work fell by 53,000 in seasonally adjusted terms to 2.538 million.
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