Gold set for first weekly drop in four; US jobs data in focus

Gold prices were set to mark their first weekly fall in four after the dollar firmed, but traded steadily on Friday as investors stayed cautious ahead of key jobs print due later in the day to gauge the potential for U.S. rate cuts by March.

FUNDAMENTALS

* Spot gold edged up 0.2% to $2,032.36 per ounce by 0215 GMT. Bullion, however, fell 1.8% for the week so far.

* U.S. gold futures edged 0.1% higher to $2,048.80.

* Bullion scaled an all-time peak of $2,135.40 on Monday on elevated bets for a cut by the U.S. Federal Reserve, before dropping more than $100 on uncertainty over the cut’s timing.

* The dollar index was on track to snap three straight weeks of losses.
* A stronger dollar makes greenback-priced gold more expensive for other currency holders. * Yields on benchmark 10-year Treasury notes slipped this week, but retreated from a three-month low on Friday.

* Data this week suggested that the U.S. labor market was gradually losing momentum as higher borrowing costs curb demand in the broader economy.

* After an uptick in weekly U.S. jobless claims, traders positioned for the non-farm payrolls data due at 1330 GMT.

* Traders were pricing a 65% chance of a rate cut by March next year, CME’s FedWatch Tool showed, but a Reuters poll saw rates unchanged until at least July.

* Lower interest rates tend to support non-interest-bearing bullion.

* The yen extended its towering rally against the dollar, as traders ramped up expectations that the end of Japan’s ultra-low interest rates was closing in.

* Spot silver rose 0.2% to $23.83 per ounce, while platinum gained 0.6% to $912.31 and palladium inched 0.5% higher to $974.25 per ounce.

DATA/EVENTS (GMT) 0430 India Repo Rate, Cash Reserve Ratio — 0700 Germany CPI Final Nov 1330 US Non-Farm Payrolls Nov 1600 Russia CPI Nov

(Reporting by Harshit Verma in Bengaluru; Editing by Sherry Jacob-Phillips)