* Palladium heads for first weekly gain in five
* U.S. benchmark yield hits peak since June
* U.S. non-farm payrolls data due at 1230 GMT (Adds comment, updates prices)
Oct 8 (Reuters) – Gold steadied on Friday ahead of U.S. non-farm payrolls data with some analysts expecting a strong number to bolster bets for tapering of economic stimulus and trigger further declines in bullion.
Spot gold rose 0.1% to $1,757.30 per ounce by 0657 GMT, while U.S. gold futures were little changed at $1,758.20.
“Gold’s fate will be determined by the non-farm payrolls print tonight,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA, adding some investors in Asia were buying gold to hedge risks of a surprise outcome from the report.
“If we see a number above 500,000, gold is likely to resume its downtrend as markets lock and load December for the start of Fed taper,” Halley said.
Gold also largely ignored a firm dollar, which usually tends to dampen bullion’s appeal amongst investors holding other currencies, and higher U.S. 10-year Treasury yields.
A Reuters survey predicted non-farm payrolls likely rose by 500,000 jobs in September.
Fed Chairman Jerome Powell had signalled last month there was broad agreement among policymakers to begin reducing the central bank’s monthly asset purchases as soon as November, as long as the September jobs report was “decent.”
Reduced stimulus and higher interest rates lift bond yields, translating into increased opportunity costs of holding bullion which pays no interest.
While safe-haven gold will find some support from elevated inflation, geopolitical tensions and rising Delta coronavirus cases, factors including the Fed’s tapering, easing pandemic-led restrictions and strong growth will cap prices, Fitch Solutions said in a note dated Oct. 7, forecasting prices to average $1,700 next year.
Spot silver fell 0.4% to $22.48 per ounce.
Platinum rose 0.6% to $984.89 and was up 1.5% for the week.
Palladium advanced 0.4% to $1,967.42, heading for its first weekly gain in five, up over 3%. (Reporting by Eileen Soreng in Bengaluru, additional reporting by Arpan Varghese; editing by Krishna Chandra Eluri and Jason Neely)