A series of central bank rate cuts only served to stoke investor fears about global economic growth, with a stronger dollar in reaction to a move by the European Central Bank putting a damper on gold prices.  — File Photo by Reuters

SINGAPORE: Gold remained on track for a second straight week of gains on Friday, though it was little changed from the day before as investors waited for more US jobs data to help gauge the health of the world’s top economy and provide trading cues.

Some market participants said Thursday’s private US employment data indicated that key non-farm payroll numbers on Friday could also be robust, dampening hopes for further easing by the Federal Reserve and hurting appetite for commodities.

“People are concerned that tonight’s non-farm payrolls figures might be better than expected, which will decrease the chances of quantitative easing by the Fed – bad news for gold,” said Yuichi Ikemizu, head of commodity trading, Japan, Standard Bank.

A series of central bank rate cuts on Thursday only served to stoke investor fears about global economic growth, with a stronger dollar in reaction to a move by the European Central Bank putting a damper on gold prices.

The dollar index gained more than 1 per cent, its biggest daily rise in nearly eight months, in the previous session, while the euro struggled near five-week lows against the greenback.

Spot gold was little changed at $1,605.19 an ounce by  0313 GMT on Friday, on course for a weekly rise of 0.4 per cent.

The US gold futures contract for August delivery  edged down 0.2 per cent to $1,605.90.

Technical analysis suggested that spot gold could fall to $1,586 an ounce during the day, said Reuters market analyst Wang Tao.

Thursday’s data showed that US private employers stepped up hiring in June and the number of Americans filing new claims for jobless benefits last week fell by the most in two months, hopeful signs for the struggling labour market.

The physical bullion market remained subdued, with buyers sidelined after prices rose above $1,600 and potential sellers eyeing $1,620 or above, dealers said.

“The current price level isn’t attractive enough to lure buyers back,” said Peter Tse, director at ScotiaMocatta in Hong Kong, adding that jewellers are likely to enter the market if prices drop to $1,550-$1,560.

Most local currencies were on the defensive against the dollar, which diminishes the purchasing power of buyers holding these currencies, he added.