Gold Heads for Weekly Gain After Weak Data Cools Fed Rate Bets

Gold earlier tested support near $4,050, a level that had held during the prior decline. The bounce from that zone set up the challenge of $4,200. A close above that threshold would mark a new record high. The metal has rallied more than 20 percent this year, supported by central bank purchases and geopolitical uncertainty, as detailed in the gold profile.

Central banks have been net buyers. The People’s Bank of China added to its reserves for a 10th consecutive month in April, according to official data. Other emerging-market central banks have also increased holdings, diversifying away from the dollar. Ongoing tensions in the Middle East and the war in Ukraine have sustained safe-haven demand, traders said.

The easing of rate hike expectations lifted other precious metals. Silver and platinum both rose.

Fed officials have struck a cautious tone in recent speeches. Several said they need more evidence that inflation is sustainably falling toward 2 percent before cutting rates. The next major test for gold comes with the U.S. jobs report on June 7. A strong print could revive rate hike bets, traders said, while a weak number would reinforce the current dovish repricing. The Fed’s next policy decision is on June 12. The jobs report and the May consumer price index are due before then.