Gold slips, set for weekly loss on Mideast tensions, rate-hike fears

Gold prices edged lower on Friday, and were set for a weekly loss, as tensions in the Middle East dampened hopes for a U.S.-Iran peace deal amid rising inflation and rate-hike fears.

FUNDAMENTALS

* Spot gold was down 0.3% to $4,462.22 per ounce, as of 0049 GMT. It has fallen about 1.6% for the week so far.


* U.S. gold ‌futures for ⁠August delivery ⁠fell 0.4% to $4,489.

* The Iran-backed Hezbollah militia rejected a new ceasefire in Lebanon and Israel said it would not withdraw troops from the country, undermining U.S. President Donald Trump's efforts to halt fighting there to forge peace with Tehran.

* Kansas City Federal Reserve President Jeffrey Schmid said on Thursday that the U.S. central bank's choice now is between being patient and holding interest ⁠rates steady ‌or hiking rates to tamp down inflation that has been above target for years.

* Meanwhile, San Francisco Fed President Mary Daly ⁠said the U.S. interest-rate path will depend on how the economy evolves, adding that monetary policy is "in a good place" and the Fed is prepared to respond "either way."

* While gold is seen as a hedge against inflation, higher rates tend to weigh on the non-yielding metal.

* Investors are now awaiting the May U.S. nonfarm payrolls data, due later in the day, to gauge the Fed's monetary policy path.

* India's ‌physically backed gold exchange-traded funds (ETFs) recorded their first net monthly outflow in a year in May, as investors booked profits following a sharp rise in prices triggered ⁠by higher import duties, data showed on Thursday.

* Physical investment is set to replace jewellery as the largest component of gold demand for the first time this year due to double-digit losses in jewellery amid high prices, consultancy Metals Focus said in its annual report.

* Spot silver fell 0.6% to $73.45 per ounce, platinum dropped 1.3% to $1,876.58, and palladium slid 1.5% to $1,301.25. All metals were headed for a weekly loss.

DATA/EVENTS (GMT)

0900 EU GDP Revised QQ, YY Q1

1230 US Non-Farm Payrolls May

1230 US Unemployment Rate May

1230 US Average Earnings YY May