Gold dips towards 10-week low ahead of US jobs data

Gold slipped on Friday, but was trading above the 10-week low touched in the previous session, as dollar rose against the yen on signs of progress in the U.S.-China trade dispute and strong U.S. economic data. Investors are now awaiting the U.S. jobs numbers for more signals on the strength of the economy. Spot gold slipped 0.2 percent to $1,289.71 per ounce by 0745 GMT, after touching its lowest since Jan. 25 at $1,280.59 in the previous session. The metal was down about 0.2 percent for the week. U.S. gold futures were steady at $1,294.20 an ounce.

"The market is expecting some positivity in the (payrolls) data today, so if it moves against expectations there might be some sharp fluctuations in the gold price," said Benjamin Lu, an analyst with Singapore-based Phillip Futures. "There is a strong possibility that the risk appetite might get strong if economic indicators show some sort of upturn (in the economy`s strength) and we might see gold prices dropping." Gold on Thursday breached its 100-day moving average around $1,282 an ounce for the first time since at least November, mainly pressured by robust U.S. data and as trade optimism improved risk appetite. 

U.S. President Donald Trump said on Thursday the two sides were close to a trade deal that could be announced within four weeks. Holdings in the world`s largest gold-backed exchange-traded fund, SPDR Gold Trust, also fell for a fourth consecutive session on Thursday. Holdings were at their lowest level since Dec. 10 at 24.52 million ounces. Trading volumes are expected to be low as the world`s largest gold consumer, China, is closed for the Tomb Sweeping Day holiday. Among other precious metals, spot platinum was steady at $897.85, after rising to its highest since mid-June 2018 at $901.49 an ounce in the previous session. The metal is up more than 6 percent this week, the most since January 2017.

"Platinum is probably benefiting at the expense of palladium, as the market takes a view on auto-catalyst substitution," said Nicholas Frappell, global general manager at ABC Bullion.

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The spread between palladium and platinum has declined nearly 160 percent to around $470 an ounce from a record $753 in mid-March. Both metals are primarily consumed by automakers for catalytic converter manufacturing. Palladium was up 0.2 percent at $1,369.44 an ounce but was on course for a second weekly fall. Silver was up 0.1 percent at $15.16 per ounce, having fallen to its lowest since end-December in the previous session.