Gold extended gains on Friday as the dollar fell against the yen after a report suggested that US President Donald Trump would next take up trade issues with Japan, while investors feared another round of Sino-US tariffs any moment. Spot gold was up 0.1 percent at $1,200.88 as of 0645 GMT, after it hit a near one-week high on Thursday at $1,206.98, and headed for a third straight session of gains.
US gold futures rose 0.2 percent to $1,206.40 an ounce. The dollar declined against the yen following a CNBC television report on Thursday that Trump told a Wall Street Journal columnist he might take on trade issues with Japan. "The stronger yen versus dollar is leading to some buying in gold ... The recent low of around $1,160 in August is really the bottom in gold for now," said Yuichi Ikemizu, Tokyo branch manager, ICBC Standard Bank.
"The next moves will mostly depend on the employment data tonight and the September Federal Reserve meeting. But it mostly looks like gold is slowly coming up and the dollar is coming off as gold is too oversold and the dollar has been overbought."
"Gold faces a quick correction if US jobs data, inflation in particular comes in near or above target. The Fed has hiked two times in 2018 and is on course to lift rates twice more," said Alfonso Esparza, a senior analyst at OANDA.