Gold drifts lower in run-up to US payrolls data

Gold prices eased on Friday as investors keenly look forward to the US non-farm payrolls report due later in the day to assess the likely path of the Federal Reserve's rate-tightening cycle.

Spot gold was down 0.1 per cent at $1,828.90 per ounce, as of 0334 GMT. US gold futures also fell 0.1 per cent to $1,832.90.

Bullion is likely to decline this week and is down about 1.4 per cent for the period.

"The recent hawkish comments from the US Fed Chair, a recovery in the greenback and easing fears of a recession in many economies caused a withdrawal of investment from gold-like safe-havens," said Hareesh V, head of commodity research at Geojit Financial Services.

Earlier this week, Fed Chair Jerome Powell warned of higher and potentially faster interest rate hikes to contain high inflation.

Higher interest rates to control rising prices discourage investment in non-yielding gold.

Gold had jumped more than 1 per cent on Thursday after data showed the number of Americans filing new claims for unemployment benefits last week increased by the most in five months, spurring hopes that a softening labor market could pave the way for less-aggressive rate hikes from the Fed.

Investors' attention is now on the US Labor Department's non-farm payrolls (NFP) data due at 1330 GMT. The report is expected to show non-farm payrolls increased by 2,05,000 in February, according to economists polled by Reuters.

Gold will likely "trade choppy" as investors await the US NFP and unemployment data to get "fresh cues" on Fed's next moves, Geojit's Hareesh said.

The dollar index was on track for a weekly gain, making bullion more expensive for buyers holding other currencies.

Spot silver lost 0.6 per cent to $19.95 per ounce, platinum shed 1 per cent to $935.05 and palladium fell 0.6 per cent to $1,380.89.

All three metals were set for a weekly decline, with silver bound for its worst week since mid-October last year.