Gold set for best week since March; traders eye U.S. jobs data

Gold prices held steady on Friday but were on track for their biggest weekly gain since March, with investors keenly awaiting US jobs report to gauge the Federal Reserve's rate hike plans.

Spot gold was little changed at $1,710.09 per ounce, as of 0651 GMT. Prices have risen about 3 per cent so far this week, helped by the dollar and Treasury yields retreating from multi-year peaks.

US gold futures eased 0.2 per cent at $1,716.90.

The dollar index was down 0.1 per cent and benchmark US yields steadied after rising overnight.

"US jobs data will shape expectations about how much more tightening is yet to come from the Fed in coming months," said Ajay Kedia, director at Kedia Commodities in Mumbai.

"A corrective drop towards $1,680 is possible for gold after the data."

The US nonfarm payrolls report is due at 1230 GMT, with economists forecasting 250,000 jobs to have been added last month.

Earlier this week, data showing declines in US job openings and weaker manufacturing, and a smaller-than-expected rate hike by the Australian central bank, stoked expectations of a slowdown in the Fed's rate-hike pace.

But those hopes faded as Fed officials reiterated their commitment to containing high inflation.

While gold is considered a hedge against inflation, rapid US monetary policy tightening has reduced the non-yielding bullion's appeal while boosting the dollar.

Silver was flat at $20.66 per ounce, bound for its biggest weekly rise since July, up more than 8 per cent so far.

"Short-covering is helping the metal outperform," with strong demand from India also being supportive, said ANZ commodities strategist Soni Kumari.

However, slowing economic activity and rising rates posed a challenge to silver prices, Kumari added.

Platinum fell 0.2 per cent to $919.97, but was on track for its best weekly since June 2021.

Palladium dipped 0.4 per cent to $2,251.84, but was up for a second straight week.