Investing.com - Gold prices will remain vulnerable to further gains in the dollar this week after the precious metal ended slightly higher on Friday but still notched up a third straight week of declines, weighed down by a stronger dollar.
Metals traders will be awaiting updates on U.S. producer price and consumer price inflation on Wednesday and Thursday, respectively, amid ongoing speculation over how quickly interest rates may rise this year.
In a light week on the economic calendar, trade talks will also be in the spotlight with officials from the U.S., Canada and Mexico set to resume talks on the North American Free Trade Agreement in Washington on Monday.
Gold futures for June delivery settled up $2.9 or 0.22% at $1,315.60 on the Comex division of the New York Mercantile Exchange late Friday, for a weekly loss of 0.58%.
Gold clawed higher as the dollar eased away from the highs of the year after disappointing U.S. employment data for April.
The Labor Department reported that the U.S. economy added fewer than expected jobs in April while wages barely rose. However, the report did little to alter the view that the Fed will continue to hike rates this year.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose to 92.75, the most since December 27 before pulling back to 92.42 late Friday. The index posted a weekly gain of 1.17%.
A rising dollar tends to pressure commodity prices, which are denominated in the U.S. currency and become more expensive to holders of other currencies when the dollar appreciates.
The dollar has risen as investors bet that the Fed will continue raising rates while other central banks, including the European Central Bank and the Bank of England will act more slowly.
Expectations for higher interest rates tend to be bearish for gold, which struggles to compete with yield-bearing assets when rates rise.
Elsewhere in precious metals trading, silver futures settled up 0.63% at $16.55 a troy ounce, to eke out a weekly gain of 0.17%.
Platinum futures settled at $911.60, up 0.84% for the day, for a weekly loss of 0.57%.
Among base metals, copper was little changed at $3.082 in late trade for a weekly gain of 0.66%.
Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.
Monday, May 7
Australia is to release data on business confidence.
Financial markets in the UK will be closed for a holiday.
Tuesday, May 8
Australia is to publish data on retail sales.
China is to report on trade figures.
Fed Chair Jerome Powell is to speak at an event in Zurich, Switzerland.
The UK is to release industry data on house price inflation.
Wednesday, May 9
Canada is to report on building permits.
The U.S. is to release data on producer price inflation.
Thursday, May 10
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
China is to release inflation data.
The UK is to produce data on industrial production and trade. Meanwhile, the Bank of England is to announce its latest monetary policy decision and publish what will be a closely watched rate statement.
The U.S. is to release reports on consumer price inflation and initial jobless claims.
Friday, May 11
Canada is to publish its monthly employment report.
ECB President Mario Draghi is to speak at an event in Florence.
The U.S. is to round up the week with preliminary data on consumer sentiment.