Gold holds ground with US payrolls data on radar

Gold maintained its position on Friday, with a potential for a slight weekly increase, as investors focused on the upcoming U.S. payrolls data to gauge the Federal Reserve's upcoming interest rate decision. Spot gold settled at $4,477.10 per ounce, as of 0211 GMT. Prices surged 2% on Thursday, as traders reduced expectations for a September rate hike after Fed Governor Christopher Waller expressed support for maintaining rates if inflation pressures continued to ease.

U.S. gold futures for December delivery declined 0.4% to $4,522.60. Traders currently estimate a 50% probability of a Fed rate hike later this month, according to the CME FedWatch Tool. The nonfarm payrolls report is scheduled for release at 1230 GMT. According to Ross Maxwell, global strategy operations lead at VT Markets, "Weak data and increased unemployment could undermine the case for a rate hike, potentially strengthening gold.

However, the metal may remain vulnerable to shifting sentiment, as inflation data releases are anticipated next week." While gold is typically regarded as an inflation hedge, higher interest rates tend to negatively impact the non-yielding asset. On Thursday, data revealed that the number of Americans filing claims for unemployment benefits marginally increased last week, despite low layoffs, indicating stable labor market conditions.

In other metals, spot silver experienced a 0.3% decrease to $66.78 per ounce, but was poised for a weekly gain. Platinum slipped 0.8% to $1,811.28, and palladium dropped 0.4% to $1,415.75, with both commodities expected to see minor weekly declines.