Gold prices set for best week in three months; US jobs data on tap

Gold prices edged higher on Friday and were on track for their best week in three months, supported by growing expectations of a U.S. interest rate cut this month, as attention turns to the U.S. non-farm payrolls data due later in the day.

FUNDAMENTALS

* Spot gold was up 0.1% at $3,550.41 per ounce, as of 0057 GMT, hovering near an all-time high of $3,578.50 touched on Wednesday. Bullion has risen 3% so far this week.

* U.S. gold futures for December delivery edged 0.1% higher to $3,609.10.

* Data on Thursday showed the number of Americans filing new applications for jobless benefits increased more than expected last week, consistent with softening labor market conditions.

* Furthermore, the ADP National Employment Report showed U.S. private payrolls increased less than expected in August. * Several Fed officials this week said that labor market concerns continue to animate their belief that rate cuts lie ahead. Fed Governor Christopher Waller said he thinks the U.S. central bank should be cutting at its next meeting. * Traders are currently pricing in a near 100% chance of a 25-basis-point Fed rate cut at the end of the two-day policy meeting on September 17, according to CME Group’s FedWatch tool.

* Non-yielding gold typically performs well in a low-interest-rate environment.

* Focus will also be on the U.S. non-farm payrolls data, due at 1230 GMT, that could offer more clarity on Fed’s interest rate trajectory. The August non-farm payrolls are expected to have grown by 78,000 jobs, according to Reuters poll, versus 73,000 in July.

* Poland’s central bank Governor Adam Glapinski plans to propose an increase in the target for gold as a percentage of reserves to 30% from 20% currently, he said on Thursday.

* Elsewhere, spot silver was up 0.1% at $40.70 per ounce. Platinum gained 1.1% to $1,382.18 and palladium rose 0.1% to $1,129.12.

DATA/EVENTS (GMT)

0600 Germany Industrial Orders MM July

0600 Germany Manufacturing O/P Cur Price SA July

0600 Germany Consumer Goods SA July

0600 UK Halifax House Prices MM, YY August

0600 UK Retail Sales Ex-Fuel MM July

0600 UK Retail Sales MM, YY July

0645 France Reserve Assets Total August

0900 EU GDP Revised QQ, YY Q2 1230

US Non-Farm Payrolls August 1230 US Unemployment Rate August

1230 US Average Earnings YY August.