Gold set for weekly gain; traders await US payrolls report

Gold prices held steady on Friday, but were headed for a weekly gain, while market focus shifted to a crucial U.S. payrolls report for better clarity into the extent of an expected rate reduction this month.

FUNDAMENTALS

* Spot gold held its ground at $2,516.19 per ounce, as of 0047 GMT, after hitting a nearly one-week high in the previous session. Bullion has climbed 0.5% for the week so far.

* U.S. gold futures edged 0.1% higher to $2,546.00.

* Bullion, which doesn’t offer yields, usually performs better when interest rates are low. * Bets for a 50-basis-point (bp) cut by the U.S. Federal Reserve have risen to 41% from 34% a week ago, but traders still see a 59% chance that the reduction will just be 25 bps, according to CME Group’s FedWatch tool. * The U.S. nonfarm payrolls data is due at 1230 GMT. Fed Board Governor Christopher Waller and Fed Bank of New York President John Williams are also scheduled to speak later in the day. * Data on Thursday showed that U.S. private employers hired the fewest number of workers in 3-1/2 years in August, potentially hinting at a sharp labour market slowdown. While, the number of Americans filing new applications for jobless benefits declined last week.

* The Institute for Supply Management (ISM) said its non-manufacturing purchasing managers (PMI) index was little changed at 51.5 last month, compared with 51.4 in July.

* Spot silver was flat at $28.81 per ounce and platinum gained 0.5% to $928.45.

* Palladium fell 0.1% at $939.88 and headed for a weekly fall.

* Canada’s First Majestic has agreed to buy Gatos Silver for $970 million in an all-stock deal, the miners said on Thursday, against the backdrop of surging prices of the metal.

DATA/EVENTS (GMT)

0600 Germany Industrial Output MM July

0600 Germany Industrial Production YY SA July

0600 UK Halifax House Prices MM August

0600 UK Halifax House Prices YY August

0645 France Reserve Assets Total August

0900 EU GDP Revised QQ Q2

0900 EU GDP Revised YY Q2

1230 US Non-Farm Payrolls August

1230 US Unemployment Rate August

1230 US Average Earnings YY August