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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Spot gold fell 2%, extending its losses, after a bigger-than-expected August jobs gain in the U.S. The precious metal was still on track for a modest weekly gain.
Spot gold was trading at $4,380.59 an ounce, while U.S. gold futures for December delivery dropped 2.6% to $4,424.10 an 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.
The U.S. economy added jobs at a brisk pace in August, reversing a summer slowdown in hiring, while the unemployment rate held steady. Nonfarm payrolls rose a seasonally adjusted 162,000 for the month while the unemployment rate, as expected, held steady at 4.1%, the Bureau of Labor Statistics reported Friday.
On Thursday, 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.
Although gold is typically seen as an inflation hedge, higher interest rates tend to diminish non-yielding bullion’s appeal.
Citigroup said it remains bullish on precious metals, with its 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.
