Gold this week: Modest gain in sight as investors await US payrolls data

On Friday, gold prices remained steady and were expected to rise modestly as traders focused on upcoming US payrolls data, which could provide insight into the Federal Reserve's next interest rate decision. Spot gold traded at $4,469.26 per ounce at 0633 GMT. On Thursday, prices surged by 2% as traders adjusted their expectations for a September rate hike after Fed Governor Christopher Waller signaled support for keeping rates unchanged if inflation pressures continued to ease.

US gold futures for December delivery dropped 0.5% to $4,515.70. Currently, there is a roughly 50% chance of a Fed rate hike this month according to the CME FedWatch Tool. The upcoming nonfarm payrolls report, due at 1230 GMT, will be closely watched. If the data reveals weak figures or a rise in unemployment, gold prices may recover, but the metal may remain vulnerable to changing market sentiment as inflation data is released next week.

Global strategy operations lead at VT Markets, Ross Maxwell, noted that central bank demand continues to support the market and may limit the extent of any price decline. Although gold is generally seen as a hedge against inflation, higher interest rates can negatively impact the non-yielding asset. On Thursday, the number of Americans filing for unemployment benefits increased slightly, indicating relatively stable labor market conditions.

Meanwhile, US Vice President JD Vance stated that the conflict between Washington and Tehran was not a war and did not provide a timeline for its resolution, highlighting the challenges faced by the Trump administration as the hostilities enter their seventh month and mid-term elections approach. Silver fell 0.5% to $66.59 per ounce, while platinum declined 1.2% to $1,803.53 and palladium declined nearly 1.3% to $1,403.03, with both metals expected to experience slight weekly declines.