Spot gold traded at $4,477.10 per ounce as of 0211 GMT Friday, holding steady ahead of the nonfarm payrolls report scheduled for 1230 GMT. December gold futures declined 0.4 percent to $4,522.60. The precious metal has posted a modest weekly gain.
Fed funds futures are pricing a 50 percent probability of a rate hike later this month—a recalibration that followed Fed Governor Christopher Waller's comments Thursday that he would support holding rates if inflation data continued to moderate. Gold rallied 2 percent on those remarks as traders cut September rate hike expectations.
The employment report will be critical to the Fed's labor market assessment. Weak payrolls or a rise in unemployment could reduce the case for tightening and support gold prices, according to Ross Maxwell, global strategy operations lead at VT Markets. Maxwell noted that gold remains sensitive to shifting sentiment ahead of next week's inflation data releases.
Central bank buying continues to underpin the gold market, providing a structural floor against significant declines. Yet elevated interest rates impose a persistent headwind on the non-yielding asset—as bond yields rise, the opportunity cost of holding gold increases.
Unemployment claims ticked up marginally last week during generally low layoff activity, suggesting the labor market remains stable underneath.
In other metals, spot silver dipped 0.3 percent to $66.78 per ounce and is tracking for a weekly gain. Platinum fell 0.8 percent to $1,811.28 and platinum and palladium are both headed for slight weekly losses. Palladium dropped 0.4 percent to $1,415.75.
