Gold held steady on Friday and was poised for a small weekly gain, as attention turned to highly awaited U.S. payrolls data for clues on the Federal Reserve’s next interest rate decision.
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Gold steadied on Friday but was on track for a modest weekly gain as investors scaled back bets on a September interest rate hike ahead of U.S. non-farm payrolls data that could shed further light on the Federal Reserve’s policy path.
Spot gold was little changed at $4,474.78 per ounce by 0910 GMT, while U.S. gold futures for December delivery dropped 0.4% to $4,521.40 per ounce.
However, bullion was on track for a small weekly rise having rebounded from a three-week low hit on Wednesday, with prices getting a further boost from Fed Governor Christopher Waller’s comments.
Traders scaled back bets for a September rate hike after Waller said he was leaning toward keeping interest rates steady at the central bank’s policy meeting this month if upcoming inflation data shows moderating price pressures.
“The news that Governor Waller was leaning towards no increase gave gold something of a steroid shot, with the metal gaining around 2%. But the effect is likely to prove short-lived as fresh data takes precedence,” independent analyst Ross Norman said.
“There is a sense of refreshed optimism among gold investors just now, almost as if the market is looking for excuses to move higher,” Norman said.
The U.S. nonfarm payrolls report is due at 1230 GMT, followed by the August CPI and PPI inflation reports next week.
Although gold is typically seen as an inflation hedge, higher interest rates tend to diminish non-yielding bullion’s appeal.
Citi said it remains bullish on precious metals, with their 0–3-month point price target for gold at $4,800 per ounce and 6–12-month forecast of $5,000.
“Momentum in gold prices will likely attract retail buying similar to the second half of 2025, both physical and futures globally,” Citi said in a note.
Gold demand in India improved this week as a drop in prices spurred some buying interest, while investment flows continued to support consumption in top consumer China.