Gold prices hovered near a four-week high on Friday, poised for their best week since mid-November, as investors awaited US jobs data to gauge how aggressively the Federal Reserve might cut interest rates this year.
Spot gold edged 0.1% higher to $2,672.64 per ounce, as of 0309 GMT.
Bullion has gained more than 1% so far this week. US gold futures rose 0.2% to $2,696.30.
Investors will closely watch the key government payrolls report scheduled for release at 8:30 a.m. ET.
According to a Reuters survey, non-farm payrolls are expected to have increased by 160,000 in December, following a jump of 227,000 in November.
“We expect gold to drop a little in case the Non-farm payroll (NFP) report comes on a higher side. Reports suggest that President-elect Trump may announce an economic emergency to roll out tariffs smoothly. All these should support the dollar and gold might just decline in the near term. Having said that, $2,650 is a good support,” said Jigar Trivedi, senior analyst at Reliance Securities.
Gold prices strengthened to a nearly four-week high in the previous session, supported by safe-haven demand, while investors weighed how US President-elect Trump’s policies would impact the economy and inflation.
Trump will return to office on Jan. 20 and his proposed tariffs and protectionist policies are expected to fuel inflation.
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Kansas City Federal Reserve President Jeff Schmid signalled on Thursday a reluctance to cut interest rates again as the US central bank comes into the New Year facing a resilient economy and inflation that remains above its 2% target.
Gold is used as a hedge against inflation, although higher interest rates reduce the appeal of holding the non-yielding asset.
Spot silver was up 0.4% to $30.24 per ounce, platinum dropped 0.1% to $957.43 and palladium added 1.4% to $939.13. All three metals were headed for weekly gains.
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