BENGALURU: Gold prices retreated on Friday as profit-taking kicked in after bullion jumped over 1% earlier in the session on hopes of rate cuts buoyed by weaker than expected US jobs data.

Spot gold fell 0.7% to $2,428.36 per ounce as of 1708 GMT. US gold futures slipped 0.4% to $2,471.50.

However, gold has gained 1.8% so far this week as rising safe-haven demand due to Middle East tensions and expectations of rate cuts by the US Federal Reserve made the metal more appealing for investors.

“At this level we do anticipate a pullback and some profit taking but fundamentally here’s a lot more upside potential than the downside risk,” said Alex Ebkarian, chief operating officer at Allegiance Gold.

Meanwhile, US 10-year yields dropped to their lowest since December and the dollar hit its lowest since March after data showed that employers added fewer jobs in July than economists had forecast, while the unemployment rate increased to 4.3%.

The data follows comments from Fed Chair Jerome Powell who on Wednesday said that rates could be cut as soon as September if the US economy follows its expected path.

Bullion is traditionally considered a hedge against geopolitical and economic risks, and lower interest rates reduce the opportunity cost of holding the asset.

“The marketplace just now is factoring in a better-than-70% chance for a 50-basis-point cut by the Fed at the September FOMC meeting,” said Jim Wyckoff, senior market analyst at Kitco Metals in a note. Elsewhere, spot silver fell 0.7% to $28.34 per ounce, platinum rose 0.2% to $960.60 and palladium dropped 2.02% to $886.84