Gold prices held steady on Friday and were set for a modest weekly gain, with investors keenly awaiting the US nonfarm payrolls report due at 12:30 GMT. This report is expected to provide critical insights into the Federal Reserve's next interest rate decision. Market speculation, according to the CME FedWatch Tool, currently places an approximately 50% chance of a Fed rate hike later in September.
Spot gold was trading at $4,469.26 per ounce as of 06:33 GMT, following a 2% jump on Thursday. This rise was triggered by comments from Fed Governor Christopher Waller, who indicated he would support maintaining current interest rates if inflation pressures continued to moderate. US gold futures for December delivery, however, saw a slight decline of 0.5% to $4,515.70. Traders had reduced their expectations for a September rate hike from 63.2% on Wednesday to 50% after Waller's remarks.
Analysts believe weak figures in the nonfarm payrolls report and a rise in unemployment could diminish the likelihood of a rate hike, potentially allowing gold to recover. However, the metal remains susceptible to shifting sentiment, especially with inflation data releases scheduled for the following week. Despite being a traditional inflation hedge, elevated interest rates typically weigh on non-yielding assets like gold. Nonetheless, ongoing central bank demand is expected to provide some support and limit any significant declines.
In other precious metals, spot silver decreased by 0.5% to $66.59 per ounce. Platinum lost 1.2% to $1,803.53, and palladium declined by nearly 1.3% to $1,403.03, with both platinum and palladium also on track for slight weekly losses. Data released on Thursday showed a marginal increase in Americans filing for unemployment benefits last week, indicating stable labor market conditions with low layoffs.
