Investing.com - Gold prices edged lower in early morning North American trade on Friday as increased risk appetite weighed on the safe haven asset and investors looked ahead to the U.S. employment report and its corresponding impact on Federal Reserve (Fed) monetary policy.
On the Comex division of the New York Mercantile Exchange, gold for June delivery lost $4.40, or around 0.35% to $1.262.60 a troy ounce by 7:31AM ET (11:31GMT).
As global stocks hit record highs on Friday, demand for the safe haven precious metal diminished.
Investors were also cautious ahead of the U.S. jobs data that was expected to confirm that the Fed would proceed with a 25 basis point hike in interest rates at the June 14 meeting.
The U.S. Labor Department will release its monthly nonfarm payrolls report at 8:30AM ET (1230GMT) on Friday and experts widely believe that the results will set a rate hike by the Federal Reserve (Fed) at the meeting on June 14 in stone.
The consensus forecast is that the data will show jobs growth of 185,000 in May, following an increase of 211,000 in the previous month, while the unemployment rate is forecast to hold steady at 4.4%, its lowest level since 2007.
Average hourly earnings are expected to rise 0.2% from April after gaining 0.3% a month earlier, while the annualized rate is estimated to rise to 2.6%, from the prior 2.5%.
Most experts believe that only a truly "catastrophic" report would stop the Fed from raising rates in two weeks' time, while markets put the odds at around 87%, according to Investing.com's Fed Rate Monitor Tool.
Higher interest rates tend to be dollar-supportive, cutting demand for dollar-priced gold for investors using other currencies. Higher rates also weigh on demand for gold, which doesn't bear interest, in favor of yield-bearing investments.
The greenback inched higher Friday, showing caution ahead of the employment report. The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, edged forward 0.08% at 97.24 by 7:31AM ET (11:31GMT).
Elsewhere in metals trading, silver was down 0.47% at $17.200 a troy ounce.
Platinum lost 0.27% at $926.75 a troy ounce, while palladium gained 0.87% to $830.30 a troy ounce. Copper slumped 2.30% to $2.528 a pound.